New to HR? Need Help Understanding Salary Structure Components and Calculations?

Hello All,

I am Pawan Kumar. I have recently joined this site and an organization in HR Generalist profile. I don't have any idea what the basic components of a salary structure are, like PF, Gratuity, ESI, HRA, and Basic Salary.

If you can tell me how these components are calculated and what the formulas for doing so are, I will be glad to know.

Thanks and Regards,
Pawan Kumar

Hi Chitra,

Please find attached the sheet. This might help you a bit. I obtained it from this site.

Thank you.

Hi Chitr,

Thanks a lot for being the first person to help me out. If you could tell me more about PTAX, mentioned in the salary slip sent by you, I would really appreciate it.

Thanks & Regards,
Pawan Kumar
9873734548

Hi, Pawan

PTax is the professional tax to be deducted depending on the state rules.

Chitra

Hi Chitra, how are you doing?

I want to know what the specific rules are regarding statutory compliance, including PF, Gratuity, Basic, HRA, LTA, and other allowances. Are there any universal rules that apply to all companies, or do companies themselves decide the ratio of the various components?

Thank you.

Dear Chitra,

Thank you for the valuable posting. One thing, could you please confirm if the formulas you provided are in accordance with the rules and regulations? If so, could you specify the relevant acts and rules?

Thank you,
Tarun
tarunaindia@gmail.com

Hi Citra,

I am a student working on my project on compensation surveys. Could you please help me get started by sharing some information to guide my project? I would be very thankful for your assistance.

With Regards, Rajiv Kamal 9764140033

Hi! Pawan,

Please find attached the Labour Law with all the rules and regulations. This was posted by one of our CiteHR friends only.

Chitra

Hi, Tarun. Normally, what I use in my organization is basic = 50% of gross, HRA = 40% of basic, medical = 1250/-pm, travel allowance = 800/-pm, conveyance = 25% of basic, PF = 12% of basic (employer & employee), ESI = 1.75% employee & 4.75% employers, and bonus = 8.33% of basic minimum (maximum 20%). For the remaining components, it's as per your company's policy.

Chitra