Need Help Structuring a Rs 30,000 Salary with Allowances for Phone and Travel

Hi all friends, I want a salary structure of Rs 30,000, of which Rs 5,000 is included for telephone and local conveyance. Please provide me with the details as soon as possible.

Regards,
Deepa

Salary Breakdown

- Basic: $21,000.00
- House Rent Allowance: $2,400.00
- Conveyance Allowance: $5,000.00
- Medical Allowance: $1,000.00
- Education Allowance: $600.00

Total Pay

- Total Pay: $30,000.00

Hi,

First of all, clarification is required on whether the Rs. 30,000/- is part of CTC or Gross, i.e., whether the employer's contribution to PF is included in the CTC. Secondly, it needs to be confirmed whether PF is being deducted from the employee's salary or not, considering that the basic salary may be around 50%. If not, then the basic salary should be a minimum of 50%. Following this, around 20% of the gross salary can be allocated to HRA, Rs. 100/- towards children's educational allowance (up to a maximum of Rs. 200/-), Rs. 800/- towards conveyance allowance, Rs. 1250/- for medical reimbursement. If meal coupons are provided, it can be at Rs. 1300/- per month, and the remaining amount can be classified as a special allowance.

I believe these details will meet your requirements.

Regards,
Kamesh

Hi,

If this $30,000 is a gross salary, then the following may be the structure:
- Basic: $15,000
- HRA: $7,500
- Conveyance Allowance: $800
- Children Education Allowance: $200
- Medical Reimbursement: $1,250
- LTA: $1,250 (one month's basic, optional)
- Books & Periodicals: $1,000
- Special Allowance: $3,000
- Gross: $30,000/-
- PF: $1,800 (employer share)
- CTC: $31,800/-

If $30,000 is CTC, then Special Allowance will be $1,200, the rest of the items remain constant.

Please note the above is a general standard format and may differ from company to company policy.

Thanks.

Following clarifications need to be made before finalizing the structure:

(1) Whether Rs. 30,000 p.m. is gross or CTC.
(2) Beyond the applicability of ESI, PF, and Bonus - whether the company is willing to cover the employee.
(3) The salary components have to be finalized considering Gratuity and IT.

If Rs. 30,000 is the gross salary, you will have to pay Rs. 2500 as IT if you are not saving up to 1 lac per annum. Also, the basic has to be a minimum of nearly 60% of the gross considering the liability under Gratuity.

Considering the take-home as ₹30,000, find below the salary structure.

You can calculate percentages as follows:
- Basic = 40% of gross
- DA = 20% of basic
- HRA = 40% or 50% of Basic + DA
- Conveyance = $800 non-taxable
- Medical allowance = $1250 non-taxable
- Other allowances = remaining amount.

Regards,
Prajakta

Hi, will anyone be able to formulate a salary structure for 35k?

Hi, I have gone through the Excel sheet, but there are no deductions like PF (employee share) and TDS. Net and gross salary should be indicated after mandatory deductions. CTC provides a clear picture to the company but not the net salary, which is a clear picture for an employee. Therefore, it's an incomplete salary structure posted in the formatted Excel sheet.

Regards,
Khadir

Salary Structure Calculation for Rs. 30,000 CTC

If you get Rs. 30,000.00 as CTC, you may calculate as follows:

- Basic: 13,200
- DA: 6,500
- HRA: 4,190
- Conv: 1,000
- PF employer share: 2,364
----------------
Total: 27,254

For IT purposes, not mentioned in the salary register:
- Medical allowances: 1,250/month
- LTA: 1,500/month

So, the total amount would be: 27,254 + 1,250 + 1,500 = 30,004.00

Dear Vijayanath,

You have made a commendable effort to create a worksheet for calculating the various components of Pay & Allowances from a given CTC. However, there is a lack of rationale in the percentages assigned to the different components, which renders the calculations illogical. For instance, you have designated 36.5% of the CTC as the Basic Salary and 50% of the Basic Salary as House Rent Allowance. Additionally, Conveyance Allowance, Telephone Allowance, Education Allowance, and Medical Allowance have been set as fixed amounts. Leave Travel Allowance is calculated as one month (1/12) of the Basic Salary. Furthermore, 12% of the Basic Salary is allocated as the Employer's Share of Provident Fund contribution, and 4.81% as the Employer's Share of Gratuity contribution. Performance Bonus is determined as 15% of the Basic Salary, and the difference between all these components and the assumed CTC is labeled as Special Allowance. Notably, the calculation overlooks components such as Dearness Allowance, compensatory allowances, and others that are typically part of the monthly salary.

This methodology for determining the various components of Pay & Allowances from a given CTC appears arbitrary and flawed. It may not be universally applicable and fails to consider the provisions of various Labor Laws. Moreover, the worksheet does not align with the specific policies of individual employers, as it presents a generalized approach. Substantial revisions are required to make this worksheet functional and adaptable to individual needs.

Please let me know if you need any further assistance or clarification.

Best regards

Basic Salary 50% Rs. 15000/-
Dearness Allowance Rs. 2000/-
House Rent Allowance 40% of Basic + DA Rs. 6800/-
Conveyance Allowance Rs. 800/-
Washing Allowance Rs. 500/-
Children Education Allowance Rs. 100/-
Special Allowance Rs. 3900/-
Gross Salary

I assume that Telephone Expenses and Local Conveyance, which you are paying, are for expenses incurred by the employee for official purposes. You can pay it separately on a voucher also as reimbursement. If you do so, Salary will be Rs. 25000/- and that will impact on Bonus, LTA, Medical, etc.

Hi all,

I have gone through all suggested structures but don't find any logical base. What I feel is that the salary structure should be designed in a way that statutory compliance for the employer should be minimum and, at the same time, employees' income tax should be low. Moreover, take-home salary would be another important thing that should be considered while deciding the basics because PF deduction gets influenced by this. For tax benefit, payment of different allowances should be barred, and reimbursement should be given priority.

I suggest the attached structure.

Salary Structure Guidelines

Normally, the structure will be as follows:

If your company has pay scales or not, you can set it as below:
1. Basic: 45% to 50%
2. DA: 15% to 10%
3. HRA: 25% to 30%
4. CCA: 15% to 10%

Rs. 25,000/- can be fixed as above. Rs. 5,000/- can be shown as reimbursement for telephone expenses.

Regards

Dear Nikash, TNT, and others,

How do you calculate gratuity as 4.81%? Is it payable monthly along with the salary or upon termination of the service contract? The eligibility for gratuity is 5 years of service. How can it be initially included in the salary? Are the fixed allowances truly fixed for everyone, or are they adjusted as needed?

You introduce special allowances to offset differences and reach the CTC. This seems very arbitrary. Which components are subject to Income Tax and which are not, and why? It appears to be a haphazard way of handling things, with different criteria for each individual and no clear policies or guidelines to follow.

There are numerous ways to approach this, with no set policies, limits, or formats to adhere to. It seems like a free-for-all with no standard procedures in place, which I find concerning.

I do not appreciate this approach.

Can anyone help me to know how much tax benefit I receive through the following allowances monthly and yearly?

List of Allowances

1. House Rent Allowance
2. Conveyance Allowance
3. Education Allowance
4. Special Allowance
5. Medical Allowance
6. Leave Travel Allowance
7. Telephone Allowance

Best Regards,
Dash

Hi, Deepa,

I think Kamesh has good knowledge. You should confirm whether it is a CTC or Gross Salary. Without providing certain information, no one can fix the heads. Basic should be less than 50% of the gross salary. PF 12% on Basic - everyone knows it. HRA has three basic rules: medical should be less than 1250/- per month, educational allowance 200/- per month, local conveyance 800/- per month.

With Regards,
Siva

Dear Deeparani, please find attached the Excel format. This will help you in calculating the salary breakup. Password: sohum

Thanks and Best Regards,
Sohum
Operations Manager
Payroll Process Outsourcing
SNEHANK PVT LTD

Please find attached the CTC breakup. I hope this will help you out.

Thanks and Regards,
Sohum
Payroll Process Consultancy
SNEHANK PVT LTD

Dear Sohum,

Your protected worksheets are of no use to anyone as the formula bar depicts nothing, and how things work out is not clear. It is just placing certain amounts in different cells, as a shopkeeper keeps different goods on different shelves.

It looks as if you are more interested in selling these sheets than helping people out.

Dear Ramaraju,

You have defined certain limits for the allowances, but what makes you set these limits is not clear. There must be some logic, law, rule, or compulsion behind these limits. One can understand only 12% about EPF. Please explain.

Ramaraju said:
Basic should be less than 50% of gross salary.
PF is 12% on Basic; everyone knows it.
HRA has three basic rules:
- Medical should be less than 1250/- per month.
- Educational Allowance is 200/- per month.
- Local conveyance is 800/- per month.

Can anyone help me with this issue? The company provides a special allowance in addition to the breakup of my salary. Is it compulsory to add this along with the basic salary for PF calculation?

Thank you.

I want to create a salary structure with all the calculations shown for a CTC of Rs. 23,000. How can I generate the salary slip for this? Please assist me with all the necessary calculations in an Excel sheet.

Regards,
Ansuman Mohanty.

Dear all!

What is the difference between CTC and Gross salary?

Please reply asap

I need a solution for CTC Rs. 25,000/- with coverage of ESIC + PF. My idea is Basic Rs. 12,000/-, HRA Rs. 6,000, and Conveyance Rs. 2,500/-, but it is not hopeful. Kindly suggest me a structure.