Need Help For Calculating Salary

Dear All,
I need your help in calculating the salary of an individual i.e ESI, PF and all.
What all components are included in salary? what is the difference between the two.
Looking forward to hearing from you.
Thanks,
Supriya

Dear Supriya,

Salary consist of two parts 1) Payments 2) Deductions:

Payment is refered to that part on which Company makes pays cash as per commitment and is commonly refered to as Gross Pay. It may be consolidated or divided into components under whose head a Company makes payment. In the latter case Basic is usually the compulsory component while the rest depends on the Company. HRA is another such component which is usally present.

For example some Company can give DA, while others do not.

In addition to the above Loan and Advances, Awards and Settlements & Compensations are also present if applicable.

The next section is Deductions:

Under this head all statutory deductions, Recovery of Loan and Advances, Taxes, Awards and Settlements are present if applicable.

The statutory Deduction includes Provident Fund (PF) and Employee State Insurance Act; Taxes usually include Income Tax and Professional Taxes.

Net Pay= Gross Pay - Total Deductions

For details of PF and ESI please refer to the relevant acts or can search this site for further details.

Regards,

SC

Dear SC,
Thanks for your help.
but then there is a specific procedure that is followed for calculating ESI and PF, what is the basic difference between them and how do we calculate them
Regards,
Supriya

PF & ESI - both are statutory deductions.
PF : To be deducted from all - 12% of Basic salary + DA (if being paid) and VDA (if being paid). The employer too needs to contribute equivalent amount.
ESI : To be deducted at the rate of 1.75% from employees drawing salary upto Rs.7500/- gross per month, all allowances computed together. You need to ensure whether your organisation's location is exempted from ESI Deduction.
Rgds. Venkat

Dear Supriya,
Please send me any salary structure of your Company as attachment I will make the necessary changes and revert back.
Regards,
SC

Dear,
We dont have any specific salary structure, no break up is there.
I just wanted to gain an insight to the Payroll, just for my knowledge
thats the thing
thanks
supriya

Dear supriya,
Are you paid consolidated salary???
For Consolidated Salary:
Well if your Company is resigtered under ESI and PF. The deductions will be as follows:
If salary is 7500/- or less : 1.75% of Salary for ESI.
If more than Rs. 7500/- there will be no deduction under ESI
12% of Salary(since there is no separate Basic).
Professional tax and Income Tax if applicable
Regards,
SC

Actually, a good post for discussion.

General salary components include

1)BASIC

2)HRA [House Rent Allowance]

3)HMA [Home Maintnance Allowance]

4)CCA (if the job is in city) [City Compensatory Allowance]

5) Medical (This component is allowance for lower scales and reimbursement for higher scales)

6) LTA (This component is allowance for lower scales and reimbursement for higher scales)

7) Prof Developement Allowance (Only be paid for higher scales)

8) ENT (only to be paid for higher scales)

these are the general components of GROSS SALARY

now, the other components of CTC

9) PF (Employer's contribution, 12% of BASIC)

10) BONUS (if any)

11) ESI (If Applicable)

12) Conveyance (Depends on company policy)

13) Meal ( Again depends on company policy)

Now, 1-8(GROSS SALARY) + 9-13(Benefits) = Cost To Company (CTC)

Now, from the gross salary, your contribution PF and your contribution ESI is deducted and LTA, Medical or deducted depending on your company policy or paid as allowance.

Now, ESI deductions are

4.75% of Gross Salary = Employer contribution

1.75% of Gross Salary = Employee Contribution

this amount should be deposited to ESIC twice in a year

OCT - MAR contributions by end of May 15

APR - SEP contributions by end of Nov 15.

I hope this clarifies the confusion about salary and stuff.

th point to be noted is...the above description is just a basic of salary and there is lot about it.....

for any queries, feel free to ask, I will try my best to answer the queries...

Regards,

Kiran.

Well sir, the information you gave gives an bird's eye view of the act and its rates. It will be better if any body can give some more useful information like,
1.the exempted allowances (if any)
2.some special allowances exempt from ESI purview for special kind of business
eg: Uniform allowance, uniform washing allowance & hair-cutting allowance are certain kind of allowances exempt from ESI purview for a business dealing in security service.
I would like to know more on the above.
Thankyou.

Dear Kiran,
the info u gave on all the components in sal was damn good explaination.
i had one querry which is hauntin me ..... i want to know out of the ctc how much percent of the whole amount comes in hand. I knw it is diff for diff companies but approx i wanna knw wht is the % which comes i n hand
thx
vikram