Confused About My Salary Structure's 70:30 Ratio – Can Anyone Explain How It Works?

Hi Sivesh, thank you for your introduction. I would like to introduce myself. I am Vijay from Chennai, working in Core IT Hardware Sales for the HP range of products. I have a question regarding the 70:30 ratio in my salary structure. When was it introduced? It was introduced in FY 2010. We have not been able to understand the concept behind this.

I have attached an *.xls file that shows my last year's payroll and this year's payroll (70:30 ratio). My annual CTC has been reduced to 47k. Please suggest to me how this works.

Thank you.

Dear Vijay,

In a 70-30 model, please ask your HR to increase your fixed salary in such a way that after adding the fixed pay and variable pay, it equals your last CTC. The HR team made a fool of you by keeping your take-home the same and then calculating variable pay based on it. The process is that the CTC is divided into 70-30, and then its breakdown is prepared. However, as it will increase your take-home salary, they decided to decrease your CTC by 47K to keep their HR budget in control. Please check the clause in your appointment letter whether you signed for the CTC or take-home salary. If it states that your CTC is 3.9 lakhs, then they have to give you that amount in any case.

I hope you are satisfied with the resolution of your concern. If you have any more problems understanding the structure, please contact me at [Email Removed For Privacy Reasons].

Regards,
Kumar Sivesh
[Phone Number Removed For Privacy Reasons]

Hi, good to see your quick reply to the above query. I am working in a small IT firm as an HR executive. I am interested in understanding the 70-30 rule for payroll. Currently, I do not have any idea about payroll, but I am eager to learn the concept. Could you please help me understand the full-fledged payroll calculation concept?

Thanks in advance.

Regards,
Sheela

Dear Sivesh,

Thank you for your response. I now understand the concept. Will the percentage remain the same in every organization, or does it differ according to company standards?

Learning Payroll Practically

How can I learn the payroll concept practically rather than theoretically? In our company, I am not handling the payroll, but I want to learn. Could you please help me learn about payroll?

Regards,
Sheela