Salary Calculation Confusion: How Do You Handle Pay Errors Without a Basic Pay Format?

Hi HRs,

Recently, I came across a problem in another organization regarding the calculation of salary for employees. Since it is a smaller company, the HR person calculates the salary based on the working days. In the previous month, which had 31 days, there was an error in calculation. The HR person mistakenly calculated for 21 days instead of 22 days for a new employee. The company does not have a specific basic pay format; instead, a consolidated type of salary is provided to employees. Upon discovering this discrepancy, the employee raised the issue. I am unsure of the resolution that followed. In light of this situation, I would appreciate your views, ideas, and suggestions on how to calculate salaries when there is no basic pay format.

Regards,
Ram

Hi Ram,

Without a pay format, how can you fix the salary, yaar? At least there should be some format or some amount you have fixed for him when he joined, so please consider that.

For example, his salary is ₹12,500/- per month. You have to take it proportionately for 21 days.

₹12,500 * 21 / 31 = ₹8467.74. This is the amount you have to pay him.

I hope this supports your question.

Regards,
Reena

Hi,

Salary is a very sensitive issue in every organization. So, first design a salary breakup for every slab of salary. For example, take slabs up to 5000/-, above 5000/-, above 10,000, above 20,000, and fix the salary breakup. Please find the format that will surely help you out for designing it.

Regards,
Shilpa
HR MANAGER
ITcube Solutions Pvt. Ltd.
Pune

Thanks, yaar. It's very useful to all. Another query is about TDS. Could you provide some insights regarding TDS forms, applications, who will come under this, and how to deduct the amount from the pay?

Advance thanks to the members for your valuable inputs.

Cheers,
Ram

Dear Reena,

It would be really great if you could please help me in preparing a formal payslip.

Details:
For example, if the gross salary of an employee is 21,500 Rs, can you give me the salary structure for this amount (like how to determine Basic, HRA, PF, PT, allowances which are necessary) and also brief me about Payroll.

Please email the solution to [Login to view].

Thanks in advance, Reena.

Suma