New Firm's Salary Structure: How Do You Determine CTC Components Like PF, HRA, and TA?

Hello friends, we are a new firm, and I want to hire people based on CTC. However, I do not have a specific salary structure to include in the offer letter or salary slip. I would appreciate it if you could suggest any tools or templates that could help me create a salary structure.

Understanding Salary Components

I am also interested in understanding how components such as PF, HRA, and TA are determined.

Thank you in advance.

Regards,
Munali

This is not my question. I asked how to decide the basic salary, how much percentage of CTC, and the same for other factors like how much percentage for PF, gratuity, TA, DA, and other expenses.

Regards,
Munali

Example Salary Structure Based on CTC

For example, if the Cost to Company (CTC) of a candidate is Rs 321,120 per annum, then the salary structure should be as follows:

- Monthly CTC: Rs 26,760 (321,120 / 12)
- Basic: Rs 13,380 (50% of basic)
- HRA: Rs 5,352 (40% of basic)
- PF: Rs 780 (12% of basic, but most companies treat basic as Rs 6,500 for PF)
- Education allowance: Rs 800
- Transport allowance: Rs 800
- Special allowance: Rs 5,648 (basic + HRA + education allowance + transport allowance + PF - monthly CTC)
- Total earnings: Rs 26,760

Deductions include Professional Tax (PT), Income Tax (IT), Loss of Pay (LOP) if any, and advances.

Regards,
Sunder P. Vijay

Hi Munali, what is the percentage of other allowances like bonus or performance? Can you tell me percentage-wise for each component?

Regards, Munali

CTC Breakup and Salary Calculation

I have attached the CTC Breakup and Salary calculation. It will provide an accurate breakdown of the CTC.

Regards,
Nagaraj K

Salary Structure Components

Many of your help is needed for understanding the following salary components:

- **Basic:** 50% of Gross Salary
- **HRA:** 40% of Basic
- **Conveyance:** ₹800 per month is exempted from tax
- **Mobile/Telephone Allowance:** ₹1000 per month exempted from tax (on submission of bills)
- **Medical Reimbursement:** ₹1250 per month is exempted (on submission of bills)
- **LTA:** 20% of the Basic once in two years exempted from tax (on submission of bills)
- **Special Allowances:** Balance after calculating the above from Gross salary
- **Gross Per Month:** Sum of all the above

Note: For tax-saving calculations, you can take the help of the Accounts Department.

Regards,
C Karthik

You can deduct a bonus at 8.33% of the basic on the CTC. For example, if the annual CTC is 200,000, then 200,000/12 equals 16,667 per month CTC. Now, you can deduct the bonus from this amount: 16,667/105*100 equals 15,873. Subtracting this from 16,667 gives 794, which is the bonus per month. The gross per month is 15,873. Now, 60% of the gross is basic, 30% is HRA, 800 is for conveyance, and the rest is special allowance.

Thank you,

Regards, Monu

Salary Breakup for a 20,000 CTC

What will be the salary breakup for a 20,000 CTC salary per month? Also, after what amount can we withdraw the deduction of PF from our account?

I will be thankful for the same.

Regards,
Vineeta

I am an MBA HR student and I want to study the salary structure in detail. If you can suggest any websites or books, please let me know. I need one or two more examples for the same as I am having trouble understanding the HRA and DA parts.

Thank you,

Nilesh Dodiya

Can anyone please let me know the norms for private limited companies? Specifically, I am interested in understanding the leave policies, salary structure, and basic policies that need to be maintained.

I also have a query regarding PF deductions. Is the standard deduction Rs. 780 for all employees, or is it calculated at 12% of the salary?

This information is urgent, so please respond at your earliest convenience.

Regards,
Deepa

Can you please clarify one thing for me: how much percentage of Basic, HRA, Conveyance, and other allowances are deducted from the Gross? Are these percentages the same in all organizations, or do they vary? If they differ, could you please explain why they are not uniform across all companies?

With best regards,
Jyoti Thakur
HR Team.

Incentives Plan and Salary Structure for Sales and Marketing

I have been given the task to prepare the incentives plan and salary structure for Sales and Marketing personnel. Please help by providing your valuable input.

Ideal Salary Structure for Tax Savings

What should be the ideal salary structure that helps in saving taxes?

Thank you and regards,
Mehul Dhone