Salary Break-ups

Just wanna know about Salary Break-ups! Are there any standard break-up rules that needs to be followed. Anyone there who can answer this?

Hi..

CTC stands for cost to the company i.e the total expenditure of the company towards a particular employee. It includes each and every cost in terms of money and materials, some of the components are-

Gross Salary

Bonus

PF Contribution from employer side

ESI or Medical contribution from Employer side

Cell Phone Allowance

Hard furnishing goods

Food coupons

The contents of the salary break up is as below, you can prepare it at the

suitability of your own.

HRA would be50 or 60% of basic.

Basic

HRA

TA

Other Allowance

Mobile Reimbursement / Month

Gross Per Month = Sum of all the above.

Gross Per Annum= 12*Gross/Month

PF Contribution= 12% of Basic/Annum

ESI Contribution = 4.75% of Gross/Annum

Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.

Getting more than this will be covered under Mediclaim or it depends on

company policy

Annual Fixed Gross Cost= Gross/Annum+PF+ESI+Med

EX-Gratia/Bonus = A fixed amount as Bonus

Annual Total Cost = AFGC + EX Gratia/Bonus

Annual total cost is also called as CTC.

Hope now it will be very much clear to you,,

if you have any query feel free to ask.

Regards,

Amit Seth.

Hi Amit,
can u plz explain the below list
Annual Fixed Gross Cost= Gross/Annum+PF+ESI+Med
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Total Cost = AFGC + EX Gratia/Bonus
Regards
Prativa

Hi Prativa..
Dont getting what you require to know, it is clearly written..
Regarding EX-Gratia/Bonus, most of the corporates fix a gross amount as Ex-Gratia.. and that is been paid during the festival Diwali at pro-rate basis.
means it is paid on the basis of duration of service.. or it is been paid at the separation from organisation also..
Annual total cost is the total amount that been spend over the employment...
Regards,
Amit Seth.

Hi Amit,
Could you plz help me out in formulating a salary structure based on the CTC provided to an employee to minimise the tax burden on the employee.
(For employees who generall fall into tax brackets).
Regards.
Sashmita

Hi Sashmita,
The salary break-up which i have shown above includes so many components which are tax exempted.. like..
HRA is exempted from Taxes,
Medical Reimbursement of Rs. 1250/- per month is exempted
CCA of rupees 825/- per month is exmpted
On mobile allowance also there is certain tax exemption
Apart from this you may add some more, which are exempted from taxes..
Education allowance
News paper n magazine allowance
Petrol allowance upto a certain limit
Driver allowances
Hope it will help you to frame the salary structure at your end..
Regards,
Amit Seth.

Thanks for the information Amit, Plz correct me if I am wrong.. those components which are to be paid against bills (barring few- conv. medical upto a limit), employer needs to pay FBT on this.
Regards,
Sashmita