Confused About Designing a Salary Structure with Low Base and High Incentives – Need Help!

I have confusion regarding salary structure. I am working as an Assistant HR in an international call center, and my senior told me to design a salary structure where the base salary should be very less and incentives (which includes attendance allowance, food allowance, performance allowance, and transport allowance, etc.) should be more in terms of figures. So can anybody help me out if I want the total to be Rs. 8000 and Rs. 7000, then what would be the base salary and what would be the incentives?

I have tried to manage from my side. You can check the attachment for that. But I am looking for the best option.

Regards,

Dear Shweta,

The basic salary fixed for an employee also depends on the prevailing minimum wages of the state in which the call centre is located in India.

Regards,
Dhanesh

Swetha,

First of all, I wish you a Happy New Year. Maybe you are in any region in India; the basic salary is fixed between two variables, i.e., 30% minimum to 50% maximum of the gross salary.

Gross Salary, in general, includes:

1. Basic (30% to 50% of Gross)
2. HRA (40% of Basic)
3. Medical Allowance (Rs. 1250 per month)
4. Transport Allowance or Conveyance (Rs. 800 per month)
5. Special Allowance (Gross - (1+2+3+4))

Please let me know if you need any clarifications on my personal ID: ranjithhrm@yahoo.co.in

Dear Shweta,

I have prepared a salary structure for you. Please review it and revert if you have any doubts.

This is a rough draft only. Every company/organization will have their own policies in the salary structure, and it varies from organization to organization. So, please try to understand the policies of your organization; then, it will be easier for you to do the job.

Jai

Mr. Ranjith,

I have a clarification for you. It seems that the salary structure of your organization may not be the same for all others, depending on the organization's policy. TA and Medical Allowances will be fixed.

Please clarify if I am wrong.

Jai

Hi Friend,
I want to put some comments in this issue. HR Professional should be like a bridge between employer and employee so you have to play a great role.

We can easily understand why your senior is asking you to prepare this kind of structure. As basic and DA will affect in Statutory compliances, Gratuity, EL, Bonus.One thing you have to understand well, HR should be a care taker for employees.

Do fair work for employees. Now in PF there are checking the pay structure and asking us to pay 50-60% to basic and DA, otherwise you will be facing the legal issues. Please discuss the issue to your seniors.

While preparing the pay structure you have to be very careful. The pay structure will be different from one organisation to another organisation. Its all depends on the HR Policy.

Example:

Gross Salary-8000
Basic Salary -30% from gross salary (2400)
HRA -40% from basic salary (960)
Conveyance –800
Medical Allowances-1250
Educational Allowances-1000
Special Allowances-1590

It will be vary from one organisation to another organisation.

This is just my suggestion friend.


Warmest Regards,
Mohan.M.S
"Willingness to walk the extra mile to achieve excellence"

Hi Shweta,

Please find attached a copy of the payslip in a very simple form.

Rahail A. Ahmed

Hi

Recently, I have joined a company where they have nothing beside Basic and HRA so I am paying IT whereas in the last company my salary was same but I had option of getting reimbursement of telephone, magazine, car running and entertainment. This was part of CTC. If I submit bill then I don't needs to pay Income tax for these. But if I submit bill amount which crosses the amount mentioned in CTC then they don't use to reimburse.

But my present company is saying that even I submit bill then also it is under Income Tax.

Thanks
Sumita

Dear Shweta,

I have prepared a salary structure for you. Please check it out and revert if you have any doubts. This is a rough draft only. Every company/organization will have their own policies in the salary structure; it varies from organization to organization. So, please try to understand the policies of your organization, and then it will be easy for you to do the job.

Regards,
Jai

Mr. Jai,

As per your attachment, I found that the basic is changeable according to the percentage. However, as per the rule, you have to fix the basic + DA at a minimum or more as per the government rule. My suggestion is as per the state rule; you have to fix those amounts as per the Minimum Wages Act.

So, while fixing the salary, kindly break up in percentage-wise and keep the basic + DA fixed and other allowances for lower-salary individuals who don't come under the Income Tax Act. For those who come under the IT Act, please include conveyance, transport allowance, LTA, medical reimbursement, and other statutory deductions.

Regards,
Ramnath

Dear Sir/Madam,

Can you provide me with a description of the Factories Act that an HR Manager/Executive is supposed to have at their fingertips? In what areas should they be familiar?

By Joseph.

Hello, Mr. Jai. I am Amritha. Can you give me some notes regarding current trends in wage and salary administration, please? It is very urgent because I have to submit my assignment on this topic.

Hello Akhil,

Could you please provide me with some notes regarding current trends in wage and salary administration?

Thank you.

Hi, I am working as an HR Executive with an international call center. We have a different salary structure. We pay a basic salary for a couple of months, and then we pay based on the number of calls the agents make, i.e., performance-based salary. My HR manager has asked me to work on a new salary structure that reduces the attrition level and retains old employees.

We generally provide a minimum of 10k to a maximum of 13k as basic salary from fresher to experienced callers. Can anyone guide me or provide me with the raw structure of monthly-based salary, or any incentive plans, or any other benefits that attract newcomers to stick with the firm?

Regards, Bindu

Dear Shweta,

I have confusion regarding salary structure. I am working as an assistant HR in an international call center, and my senior told me to design a salary structure where the base salary should be very less and incentives (which include attendance allowance, food allowance, performance allowance, and transport allowance, etc.) should be more in terms of figures. So, can anybody help me out if I want the total to be Rs. 8000 and Rs. 7000, then what would be the base salary and what would be the incentives? I have tried to manage from my side. You can check the attachment for that. But I am looking for the best option.

As per the law, the basic salary should be fixed considering state minimum wage rules. If you violate that by reducing their basic salary, you can be prosecuted under the Minimum Wages Act. The rest of the calculation I have given in the attached sheet.

Regards,

Dear Shipra, the salary bifurcation or salary structure depends on many basic factors such as organization profitability, budget, future strategy, number of employees, management approach towards employee welfare and benefits, etc. However, the main compulsory point is that the salary structure should not be less than the minimum wage as defined by the appropriate government. You can pay over and above the minimum wage. To make it tax-friendly and enhance the "In-Hand Salary," we use a customized salary structure as per requirements. Fellow members have explained some basic concepts and ideas related to the Salary Structure. Please find attached the CTC Calculator wherein two sheets are attached (ESI Applicable and Non-ESI Applicable). Hope this will meet your requirements.