Please let me know the salary breakup for 40000 CTC?

Dear HR professionals,

Please provide me with the salary breakdown for a 40000 CTC.

There is no such standard rule to make the breakup. A breakup should be prepared in such a way as to minimize the tax liability. To minimize the tax liability, some factors are HRA, food vouchers, traveling, House Furnishing Allowance, Medical Reimbursement, Children's Education, Newspapers, and periodicals, etc. Please consult a tax consultant to create the breakup to minimize the tax liability.

You can split the salary as follows: Basic - 60% of Gross. HRA - 25% of Basic. Conveyance - Rs. 800 Refreshment - Rs. 1000 Telephone - Rs. 1000 Other allowances

Hope this will help you. Kindly cross-check with other salary breakups.

Dear Shabina,

Salary breakup of Rs. 40,000/-
Basic Salary - Rs. 16,000/-
HRA - Rs. 8,000/-
Conv. Allowance - Rs. 4,000/-
City Comp. Allowance - Rs. 4,000/-
Mediclaim Allowance - Rs. 4,000/-
Traveling Allowance - Rs. 4,000/-

Regards,
Radhey
9289028034

I think a breakup for Rs. 40,000 should be like this:

Basic Salary - 45% of 40,000, which is 18,000
HRA - 40% of Basic - 7,200
Education Allowance - 200
Conveyance Allowance - 800
Medical Allowance - 1,250
Other Allowances - 12,550

Total CTC: 50% should be Basic, Basic: 50% should be HRA, Travel: $800, and the remaining amount should be shown in special allowance.

Hi Shabina,

Let me give you an idea of the break-up for any CTC assigned to an employee.

Usually, we take:

Basic salary: 50% of CTC (No thumb rule)

HRA: 50% of Basic salary for "A" class cities and 40% for "B" class cities P.S. cities under the minimum wages act.

Conveyance: If a person's gross amount already shows that it's "taxable," you can't manipulate it abruptly to make it non-taxable. i.e. try to fix conveyance in the ratio of the tax slab (for the non-taxable amount, keep it <= 800 per month, 9600 is the tax-free amount).

The rest of the amount should be adjusted accordingly in heads of Medical allowances, Education Allowances, Special Allowances, etc.

You can reduce the net salary amount by bifurcating the part into Gratuity, Bonus, and Earned leaves per month, but more or less, it's a kind of malpractice, and I won't advocate it.

Note: try to keep the amount of Basic salary in such a way that it won't cost too much in terms of contributions under various Labour acts. i.e. EPF, Bonus, Gratuity, etc.

I hope this could give you a better idea of what sorts of points should be taken into keen consideration while preparing a salary break-up.

Regards,

Manish Gupta

Dear Shabina,

My dear friends have suggested the salary structure keeping in mind the income tax liability, but some of my friends have not considered the liability of PF (although it can be avoided within the available act for new members only). It is advisable to include the PF. There is no thumb rule for the break-up. However, as a sample, the break-up of Rs. 40,000/= CTC can be detailed below:

Basic Pay: 24,000
PF: 3,266
HRA: 7,200
Food Voucher: 2,500
Conveyance: 800
Medical: 1,250
Education Reimbursement: 1,500

WITH KIND REGARDS,
VINAY

Dear Shabina,

You can take 40% as the basic of CTC, i.e.:

Basic = 16000
HRA = 8000
Transport Reim = 5000
Medical Reim = 1000
Other Allowance = 5780
Gross Salary (A) = 35780/-
PF @ 12% = 1920
LTA @ 10% = 1600
Bonus = 700 (20% of Basic for Bonus calculation, i.e., 3500/-)
Total (B) = 4220
CTC (A+B) = 40000/-

Hope it will fulfill your query.