Salary Calculation Confusion: Should I Base It on Gross or CTC for Partial Attendance?

One employee's CTC salary is 14,650, and his gross salary is 13,000. He is present for 23 days out of 30 days. How should I calculate his salary? Should it be based on gross or CTC? If it should be based on gross, do I need to deduct from all different heads like Basic, HRA, Medical Reimbursement, conveyance, and special allowance? Please reply soon.

Understanding CTC vs. Salary

Everybody is confusing the salary with CTC. CTC is the quantum only known to the management and is not directly related to the employees. It is used to determine the labor cost, and the HR/Personnel department informs the management about the total amount incurred for each employee.

This total amount includes the salary in total (bifurcated into basic, transport allowance, HRA, allowances, etc. - to be determined separately by consulting the employee during the interview or as per company rules), plus the employer's share of PF, ESI, LWF, and bonus. Gratuity is considered in the CTC only after an employee completes five years of service.

Therefore, the salary to be paid for 23 days in your specified case would be calculated as follows: 13,000 divided by 30 and multiplied by 23.

Thank you, Mr. Ramchandran. So, on the salary slip, do I have to deduct from all different heads like Basic, HRA, Medical, Conveyance, and others? I have attached the salary structure here. Could you please design a salary slip for this employee? I also need clarification on this so I can process salaries for others. Thank you.

Annexure

The Monthly Salary Structure is bifurcated as follows:

CTC BREAK UP (Amt in Rs.)

- CTC Offered: 14,650
- Gratuity (4.81%): 317
- Bonus (8.33%): 549
- Employee's Contribution PF (12%): 780

Monthly Break up*

- Basic: 6,593
- House Rent Allowance: 2,637
- Medical Reimbursement: 1,250
- Child Education Allowance: 200
- Conveyance Allowance: 800
- Special Allowance: 1,524
- Gross Salary: 13,004
- Professional Tax: 200
- Total Deductions: 200
- Net Salary: 12,804

I have corrected the spelling, grammar, and formatting of the provided text. Let me know if you need further assistance.

Please find the salary slip attached for the month, reflecting 23 working days based on the existing salary structure. Thank you.

Bharath might have forgotten to show PT deduction of Rs. 110, so the total deduction will be 891, and the net payable will be 9078. I believe you are facing this problem because you have not yet standardized the salary breakup percentage. If you are using Excel for the same, allocate a specific % to the salary head; this will make your work easier and faster.

If you are still confused, please call me at [Phone Number Removed For Privacy Reasons].

Regards,
Shah