Hello HR professionals,
We are a USA manufacturer, starting a manufacturing unit in Gujarat- and are not versed at all about certain salary practices. Our MD in India has advised that when we offer gross annual salary to our employees in an appointment letter, we should break it down in several classes (Base Salary, Housing Allowanace, Car allowance, Vacation allowance, book purchase, Medical benefits etc.) This is done- we are told- so that the employee has less severe tax consequences.
Our USA president (me) is originally from India- so is our USA HR Manager (Archna Dhingra). But we are not much knowedgable (pretty ignorant as a matter of fact)in this matter.
Can someone educate us on the following:
1. If we hire a Production Supervisor-say, at a salary of Rs 20,000 per month, what categories should we break this salary?
2. Are there any guidelines as to what percent to apply for which class? (such as 15% for Housing- etc)
3. Can someone point us to web-sites, article etc on this subject.
4. We are going to provide housing to some key managers and cars to some others. How do we apply the break-down to them?
5. If we give medical allowance or vacation allowance, do we need to ask for proof of expense? Does this not encourage submission of fake bills?
Thanks a lot for your kindness in sharing your knowledge and wisdom.
-Rahul Shukla
President/CEO
S.S. White Technologies
Piscataway, NJ, USA
www.sswhite.net
e-mail: [Login to view]
We are a USA manufacturer, starting a manufacturing unit in Gujarat- and are not versed at all about certain salary practices. Our MD in India has advised that when we offer gross annual salary to our employees in an appointment letter, we should break it down in several classes (Base Salary, Housing Allowanace, Car allowance, Vacation allowance, book purchase, Medical benefits etc.) This is done- we are told- so that the employee has less severe tax consequences.
Our USA president (me) is originally from India- so is our USA HR Manager (Archna Dhingra). But we are not much knowedgable (pretty ignorant as a matter of fact)in this matter.
Can someone educate us on the following:
1. If we hire a Production Supervisor-say, at a salary of Rs 20,000 per month, what categories should we break this salary?
2. Are there any guidelines as to what percent to apply for which class? (such as 15% for Housing- etc)
3. Can someone point us to web-sites, article etc on this subject.
4. We are going to provide housing to some key managers and cars to some others. How do we apply the break-down to them?
5. If we give medical allowance or vacation allowance, do we need to ask for proof of expense? Does this not encourage submission of fake bills?
Thanks a lot for your kindness in sharing your knowledge and wisdom.
-Rahul Shukla
President/CEO
S.S. White Technologies
Piscataway, NJ, USA
www.sswhite.net
e-mail: [Login to view]