Salary Structure Decisions: How Do You Determine Pay Elements?

aspm15
Dear Sir/Madam,

Could you please explain how to decide the salary structure and how to determine pay elements?

Thanks & Regards,
Shripad Mokashe
Amitmhrm
Hi Shripad,

The contents of the salary breakup are as follows. You can prepare it according to your preference. HRA would be 50% or 60% of the basic salary.

- 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 is provided to employees not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Any amount exceeding this will be covered under Mediclaim or will depend on the company's 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 clarifies everything. If you have any questions, please feel free to ask.

Regards,
Amit Seth
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