Can I Offer Target-Based Salaries and Include Petrol & Mobile Allowances in Payslips?

Can I give a salary on a target basis to sales employees? (Where the salary will vary based on target achievement).

Allowance Details in Salary Slip

Can I mention Petrol Allowance (instead of conveyance allowance) and Mobile Allowance details in the Salary Slip? Please guide me.

Regards

Conveyance allowance and Petrol Allowance are two different types of allowances. In my opinion, you can use the term "Petrol Reimbursement" instead of "Petrol Allowance."

Thank you.

Regards,
Ashish

You can give a salary on a target basis as well, but you should keep in mind that the base salary should not be below the minimum wage of your state. With regards to petrol allowance or mobile allowance, any breakup in the salary slip is subject to all statutory obligations.

With regard to your first query, my answer is yes, you can give a salary on a target basis to sales employees, but ensure that it cannot be under any circumstances less than the applicable Minimum Wages in your state.

Regarding your second query, yes, you can mention Petrol Allowance (rather than conveyance allowance) and Mobile Allowance on the salary slip, but all these allowances are subject to statutory deductions like ESI if the gross salary is within Rs. 15,000 per month. Additionally, deductions of Professional Tax and IT are also applicable in accordance with the law.

If you pay the employee as Conveyance Allowance instead of Petrol Allowance through the salary slip, the concerned employee will receive IT relief at Rs. 800 per month on which no IT is payable.

Alternatively, you may consider reimbursing petrol and mobile expenses by providing payment through vouchers in cash to avoid statutory deductions from the employee's salary for the benefit of the concerned employee. This, of course, depends on your company policy.

Feel free to contact me for any further clarifications.

Thanks and regards,

Sibabrata Majumdar

Management Consultant - Legal & HR

Kolkata

(M): [Phone Number Removed For Privacy Reasons]

While considering paying petrol and mobile allowance on a voucher, please think of what the logistics issues will be, as well as the workload on the concerned accounts departments. Further, it is difficult to control and ensure that the amounts are not double paid, etc.