Struggling with Salary Calculations? Need Help with Formulas, Incentives, and Reimbursements

Hi,

My concern is related to salary calculation. Can someone please help me out with the salary calculation formula, incentives, as well as reimbursement calculation. It will be helpful for me if every senior will elaborate on the above required calculations with an example.

Good day,

Karuna Kerni

Hi Karuna,

The components of a CTC vary from organization to organization. The most general format is attached herewith for your reference. This will give you an overview of how a salary is prepared.

Advisory Note: Don't panic so much; you have to have patience in receiving replies to your queries.

Regards,
Surabhi

Hi Karuna,

Salary differs from company to company and state to state. For example, if you are in one particular state, there may be some specific percentage of deductions in terms of taxes, and at the same time, there may be a specific minimum salary for that particular sector in that state.

The basic components of any salary are as follows:

Total CTC (Cost to company), which includes:
1) Basic Salary
2) HRA 30-40% of basic salary
3) Allowances (Allowances could be of many types like traveling, leaves, food, education, medical, special, etc.) Again, it differs from company to company.
4) Fixed Incentives (if any)
5) PF
6) LTA
7) Others

Out of Total CTC, deductions may be as follows:
1) PF from employees' contribution
2) Loans
3) Taxes
4) Others

Total CTC = Gross Salary
Total CTC - Deductions = Net Salary

Regards,
Sree Kumar
UAE

You can send me your payslip, and I will let you know how your salary has been calculated. There is hardly anything to it, and it is peculiar to each organization.