masifhe
Hi, Please advise me on the below matter. under the new wage code regime, can we fix 50% of total salary as HRA and other 50% as basic pay(Wage).
From India, Bengaluru
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Saswatabanerjee
Partner - Risk Management
Nanu1953
Ceo-usd Hr Solutions
Pan Singh Dangwal
Joint Manager
Masifhe
Hr Assistant
+1 Other

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nanu1953
257

No. The employer portion of PF, Statutory Bonus when adding back to HRA - 50% condition will not satisfy.
S K Bandyopadhyay ( Howrah, WB)

From India, New Delhi
masifhe
Dear Sir,
could you please specify the point?.
for example, an employee who is drawing salary at present is total Rs.30000/- (Basic Pay 16000 and others 14000/-), after the revision can we make it 16000 basic and 14000 as HRA?

From India, Bengaluru
nanu1953
257

Dear Asif, On 16,000/- basic if you consider Employer's portion of PF, Statutory Bonus and any other annual component , then the 50:50 condition will not continue. Then 14,000/- HRA along with PF, Statutory Bonus etc. will be more than 16,000/- Basic.
From India, New Delhi
saswatabanerjee
2289

The rule is that Basic + DA + Retaining Allowance should be at least 50% of total salary If you have no other allowance, then since Basic is more than 50% of total salary, it is correct.
From India, Mumbai
nanu1953
257

The rule is wages ( Basic +DA ) should be 50% of the total wages calculated as per the definition of Wage under wage code includes Employer portion of PF and Statutory Bonus as per (a) to (i) of the first proviso. Hope Statutory compliance are fulfilled properly and the 14,000/- HRA after add back Employer PF and Bonus will be more than Basic( 16,000/-) and 50:50 condition will not be fulfilled. Hence it is wrong.
From India, New Delhi
oneus_tomoon_-forever
3

Dear Seniors
Greetings!
I often go through your day to day post. This helps me in streamlining my HR department.
Would like to thank each and every one of you on this platform for giving guidance.
Due to new wage code, I guess everyone has a query on calculating their CTC. Example - 3Lac
I have tried to some extent.
All seniors if you can check and give their feed back , shall be really obliged.
CTC Salary break up 25,000 p.m.
Basic (60% of gross) - 15000
HRA (20% of basic) - 3000
Conveyance - 800
LTA - 800
Medical allowance - 800
Mobile allowance & net - 500
Special allowance 178
Employer PF 1800
Gratuity 722
Ex-gratia / bonus - 750
Insurances - 650

Deduction from CTC Employee share to PF, PT
Thank you

From India, Vijayawada
nanu1953
257

The calculation is absolutely ok. Please go ahead.
From India, New Delhi
saswatabanerjee
2289

Dear Nanu,
i think you are doing your work on CTC and not on Gross Salary
The code on wages require you to provide basic +DA + Retaining Allowance at 50% of Gross Salary
Employers' Contribution to PF, ESIC, Bonus, Overtime, these are not a part of Gross Salary.
In his case, gross salary is only Basic +HRA
Therefore the working he has provided is correct.

From India, Mumbai
nanu1953
257

Dear Saswata,
I am extremely sorry that I do not agree with your opinion. Rather I will suggest you to read the definition of Wage time and again to understand the twist of mathematics in the definition.
In the definition there are mainly 3 parts - 1st part all remuneration payable to employee including Basic , DA and Retaining allowance. 2nd part is exclusion list (a) to (k) and 3rd part is- 1st proviso mentioning how to check 50% condition of the exclusion part from (a) to (i). If the total exclusion under (a) to (i) is more than 50% of the wage, the extra amount will add back to wage. Therefore, in the definition of wage no where it has been told to calculate 50% of gross salary.
As per definition it is all the remuneration calculated under this definition payable to employee which is nothing but CTC excluded ESIC & Insurance premium if any as those items are not payable to employee and 50% of the same will be Wages ( Basic & DA).
I have made many posts earlier explaining the same thing. If you do not accept my opinion , please check experts of India in this regard - Tax Guru, Mercer, Deloitte etc.
Thanks & Regards,
S K Bandyopadhyay (WB, Howrah)
CEO-USD HR Solutions


From India, New Delhi

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