New to HR: How Do I Create a Compliant Salary Structure with Required Leave Types?

Dear All,

I have joined the HR department for 3 months, and I have to provide the best salary structure to the management. Please guide me. Can you please inform me if PL, CL, and SL are compulsory as per government regulations?

Apurva
9879089421

Hi Apurva,

Congratulations on the assignments. The contents of the salary break-up are as follows. You can prepare it to suit your needs. HRA would be 50% or 60% of the basic salary.

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 employees who are not covered under ESI. The maximum ceiling for ESI is 10000/Month. Any amount exceeding this will be covered under Mediclaim or based on company policy.
Ex-Gratia/Bonus = A fixed amount as a bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also referred to as CTC.

I hope this is clear to you now. If you have any queries, feel free to ask. It is nearly mandatory to provide approximately 30 days of leave in a year.

Regards,
Amit Seth.

Dear Amit,

Thank you very much. It has cleared all the doubts that I had before this email. I have one more question: could you please forward me the list of PF forms, i.e., Form 2 and Form 5 for registration, along with all the form details?

I am hoping for a prompt reply.

Thanking you,
Apurva Joshi
Email: apurvajoshi_21@yahoo.com
Phone: 9879089421

Hi Apurva,

You are most welcome.

It's good that it has solved your query.

As you have asked regarding the PF forms and all, find below the information on PF as I have with me regarding the same.

Hey, as your organization must be registered with the PF, you must have a PF code.

The things which are to be done with PF are:

1. Nomination - Every employee on becoming a member is required to submit a nomination form in Form No. 2 to his employer. The employer is required to give the list of all employees entitled to become members of the scheme on the date of its application, in FORM-9, within 15 days of such date.

2. Further, the employer is required to submit a monthly return in FORM 5 giving the names and other particulars of the new members. This form is to be submitted within 15 days of the close of every month along with the Nomination form of each new employee. If no new members join the fund in a month, a NIL return should be sent.

3. The employer should, within 15 days of the close of every month, deposit the total amount of the employer's and employee's contributions and administrative charges with the PF Commissioner into the respective accounts maintained at the State Bank Of India. It should be deposited along with respective challans.

If the employer defaults in making payments of any contribution, he shall be liable to pay, by way of penalty, damages at the following rates:

- Less than 2 months - 17% Per Annum
- 6 months and above - 37% Per annum

Apart from this, the contribution amounts are deposited along with challans.

Hope it must have solved some of your queries.

Regards,

Amit Seth.

Hi Apurva,

Regarding the registration of an organization with the PF, the formalities are - even for this Act, the minimum number of employees should be 20. Every employer of an establishment to which the Employee Provident Fund Act applies should submit in Form 5A (in duplicate) to the commissioner particulars of all the branches and departments, owners, directors, partners if any, or any other person who is controlling its affairs within 15 days of the applicability of the scheme.

On receipt of Form 5A, the commissioner shall verify the particulars submitted and, after being satisfied, shall allot an Establishment Code No.

Regards,

Amit Seth.

Hi Apurva,

The information is not sufficient. I told you that you should submit the monthly return as Form 2 revised, Form 5 for new employees, and Form 10 for departing employees along with Form 12A revised. If you have any queries, please call me at 931397704 or email at dl_kis@yahoo.com.