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.
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.
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.
Clarifications Needed 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. 2,500 as IT if you are not saving up to 1 lakh per annum. Also, the basic has to be a minimum of nearly 60% of the gross considering the liability under Gratuity.
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.
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.
- Basic Salary: 50% Rs. 15,000/-
- Dearness Allowance: Rs. 2,000/-
- House Rent Allowance: 40% of Basic + DA Rs. 6,800/-
- Conveyance Allowance: Rs. 800/-
- Washing Allowance: Rs. 500/-
- Children Education Allowance: Rs. 100/-
- Special Allowance: Rs. 3,900/-
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, the Salary will be Rs. 25,000/-, and that will impact 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 minimal and, at the same time, employees' income tax should be low. Moreover, take-home salary is another important factor that should be considered while deciding the basics because PF deduction is influenced by this. For tax benefits, payment of different allowances should be barred, and reimbursement should be given priority.
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 is 12% on Basic—everyone knows it. HRA has three basic rules: medical should be less than ₹1250 per month, educational allowance ₹200 per month, and local conveyance ₹800 per month.
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's Explanation
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?
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.
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.
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