How Should I Structure Salaries Under CTC? Need Urgent Advice on Basics and Components

Hi Shweta,

I want to structure the salary in my company. Can you please suggest the actual salary structure under the head CTC? What should be the basic, and how should the other components be fixed? It's a bit urgent.

Thank you.

Hi Shweta,

In our organization, we provide Basic salary along with PF, ESI, HRA, conveyance allowance, dress allowance, and traveling allowance. The sum of these components makes up the CTC.

Regards,
Divya

Hi Divya,

Thanks for the suggestion. Yes, the same structure we want to use, but there is a fixed percentage of everything in the gross salary. Do you know how to do that?

Thanks, Shweta

Dear All,

Can you suggest how to calculate the breakup sheet in the payroll system?

Warm Regards,
MANIKSING

Hi,

This is the CTC bifurcation:

Basic: 50% of CTC

HRA: 50% of Basic (for Metro cities) or 40% for others

Conveyance: 800 per month

Medical allowance: Rs. 1250/-

PF: both the contributions (Employee, Employer)

Balance any other allowances or Performance bonus etc.

Regards,
Srinivas

Hi Shweta, sorry for the late reply. Today, I visited this site for the first time. I think you might have created the structure, but I still want to share mine.

THIS IS FOR ASST. MGRS.

We have a specific structure for determining our basic salary:
- 10% of Basic is HRA
- 10% of Basic is conveyance
- 5% of basic is dress allowance
- 1.75% ESI; now, the ceiling has changed to 10500 gross
- 24% PF; 12% employer contribution

Similarly, we have structures for managers, general managers, where the percentage of allowances varies based on the cadre.

Regarding TA/DA rules:
We have different rules for executive levels, managerial levels (AM, MGE, GM). For example:
- For executives in a local city, if they travel by bus/auto, the daily allowance is 100/- and lodging is 180/-
- For managers traveling by AC II tier/Taxi, the daily allowance is 200/- and lodging is 600/-

Regards,
Divya

Hi Shrinivas,

Could you please tell me if it is a rule to have 50% of CTC as basic, as well as the other things you have mentioned? Also, please inform me about professional tax if you have any idea.

Thank you.

Hi,

CTC structuring requires the breakup of CTC into two major components: BASIC and BOA (Basket of Allowances) and then drawing up the dependent components. In my company, this is what is implemented. I have explained it in 3 steps:

1. Basic (35% of CTC)
- HRA (40% of Basic)
- PF (12% of Basic) ** Some companies make PF to be 24% (Employer share gets included within CTC)

2. BOA (65%)
- Conveyance - 9600 PA (Fixed) / Vehicle Allowances
- Sudexo - 15000 PA
- Medical - 15000 PA
- LTA
- Education Allowances

The upper limit for the above FBT is fixed by the company with the company's auditors' concurrence.

3. With deductions like Prof. tax and IT

Hope this gives you a fair idea to define the CTC.

Regards,
Veena Jain

Dear members,

That was a neat summation by Veena. I would not like to disturb this but just to add up a few more things...

CTC break-up for an income of 1.2 Lakhs per annum can be done in this fashion:

Basic - 30% of CTC - 36000

HRA (40% of Basic) - 12% of CTC - 14400

LTA - consolidated - 15000

Medical Allowance - consolidated - 15000

Conveyance - consolidated - 9600

Sodexo pass - consolidated - 15000

Special allowance - 12.5% of CTC - 15000

Total - 120000

Note: For claiming tax deduction against Medical allowance, conveyance, and LTA, the employee needs to submit bills for the same amount.

Hope this gives you a better clarity. Let me know if you need any further clarity in this.

Warm Regards, Samba.

Hi,

Could someone kindly send me in Excel format how to calculate CTC of INR 25,00,000 for a GM from the hospitality industry and what are the benefits and allowances given in detail. It is very urgent. Also, what are the TDS calculations for it?

Thank you.