Understanding Salary Structure, CTC Calculation, and Recruiter Compensation

Can anyone let me know the calculation of salary structure...??

Corrected:
Can anyone let me know the calculation of salary structure...?

Yes, even I would like to know this. How is salary, incentives, and target calculated for a recruiter?

Being an HR Generalist, I have never handled payroll independently because I have an Account Executive who does most of the break-up and annexure work. I will be thankful if somebody can help me understand how the salary break-up is done.

Sireesha V Deol

Dear Anuja,

If your company mentions CTC in the offer letter, that includes the employer's contribution for PF and also for ESI (if applicable). Salary breaks vary. Basic, HRA, CCA, CA... there will be a percentage on these items and will be calculated from the gross salary.

i.e. gross salary = CTC - employer's Contribution for PF - employer's contribution for ESI (if applicable)

-> P.F contribution of both the employee and employer is 12% of the basic.

For example, in some companies, they would have 55% as Basic, 20% as HRA, 15% as CCA, and 10% as CA. (this is calculated from your gross).

Later on, your deductions will come like {PT (Professional Tax), income tax if applicable, or if any loan is given to the employees}.

Net payable = gross salary - total deduction.

If your company mentions Gross in the offer letter, it does not include the employer's contribution for P.F and ESI (if applicable). You need to add the employer's contribution separately while deducting PF from the employee and sending it to the PF office.

Hope this information will help you.

Hi Anuja,

The contents of the salary breakup are as below; you can prepare it according to your own suitability. HRA would be 50 or 60% of basic.

- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per 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 is not covered under ESI, as the maximum ceiling for ESI is 10000/Month. If receiving more than this, it will be covered under Mediclaim or as per 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 clearer now. If you have any queries, please feel free to ask.

Yes, it is almost compulsory that you provide approximately 30 days of leave in a year.

Regards,
Amit Seth.