Please clarify that as per the Code of Wages 2019, the Basic salary (Basic+DA+RA) should be 50% of Gross Salary or 50% of CTC?

Is this salary structure correct as per the code of wages 2019 ???, if not, pls restructure it as per COW 19
BASIC + DA = 40060, HRA = 12024, CA=6012, MED AL=4006,LTA= 8012, SA=10,006, GROSS=80,120,EPF=4807,Gra=1927, CTC = 86855

From India, Bangalore

There is no reference of CTC in the Code on Wages but it is the Gross wages. The data looks alright.
From India, Mumbai
There is no reference of CTC or monthly Gross wages under the definition of wages as per wage code. The reference is 50% of all the remuneration calculated under this clause. In (a) to (i) under the exclusion clause EPF Contribution has to be considered for fulfilling 50% condition.

Therefore, to my opinion it should be 80120 + 4807 = 84927 appx 85,000/- and 50% of that i.e. 42500/- should be Basic + DA.

Due to above change of Basic & DA, PF contribution will change and 50% condition will disturb. You may adjust that from other payment pocket.

SK Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions,
+9 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
Dear Gopalnanda,

Your CTC may include many perks peculiar to your organization and the job position as well. But what is important is the gross salary payable at the end of the wage period and its structural components as agreed in the contract of employment. Perks, whether statutory or otherwise, are determined only on the basis of the sum of the included components in the wage or salary structure. If all annual pay outs are taken into consideration, the salary structure has to be altered every now and then and it would be like trimming the foot to fit the shoe. The definition of the term ' wages' u/s 2(y) of the CoW,2019 has been carefully drafted in such a manner to remedy the possible mischief done under the concept of CTC though with no reference to such terms as "gross salary" or "CTC".

From India, Salem
Thanks ,SK Sir.
I could not understand the process .
As per your advise, if we make B+DA=42,500/-, all other salary components will remain same and gross salary will be 82560/-.Then again there will be change in PF contribution & it will be Rs.5100

Under this situation, why the pf amt of Rs. 5100/- is not added again with the gross salary & change the B+DA again. when we can close it.

Can you clarify my points sir.

From India, Bangalore
Dear Gopal Krishna,

I have posted several answers explaining the process of fitment. You may go through the same. However, for your better understanding I am once again explaining the method. As per definition of Wages under wage code code, the existing remuneration structured has to be overall restructured and it will vary from organization to organization based on the existing structure. Say in case of your organization you are paying PF contribution on entire Basic and DA where as there are other organizations where the PF contribution is restricted up to 15,000/- only - the fitment will be changed.

You cannot keep all other salary component remain same to fulfill the 50% condition. If you finalize Basic and DA as 42,500/- per month then your other side considering PF contribution 5100/- per month should also be 42,500/- per month to fulfill 50% condition . Adjust it by minimizing any other monthly component as per your suitability to maintain other allowances with PF contribution 42,500/- i.e. 50% condition.

Till date there are lot of confusion about determination of Basic & DA as per definition of Wages under Wage code. To my opinion it is 50% of Total remuneration calculated and which is payable to employee with exception - Value of House accommodation, Electricity, Medical etc though those are not payable but has to be considered while calculation but Gratuity which is payable but excluded from the calculation as per definition.

Thanks & Regards,

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

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