Can Someone Help Me Calculate My Monthly Take-Home Salary from IBM Offer?

I request your help to understand how much will be my monthly take-home in the offer which I got from IBM recently. Below is the salary structure:

Compensation Components IBM Offer (Rupees):
1. Basic Salary: 242,821
2. Flexible Benefit Plan (FBP): 291,385
3. Retirals:
(A) Provident Fund (PF): 29,139
(B) Gratuity: 11,655
Annual Fixed Remuneration: 575,000

I would be very grateful if you could help me to know how much will be my monthly take-home (excluding tax).

Thanks in advance for your helping mind.

Actually, you should be asking this question to your company when you receive the offer. They would be able to provide you with accurate information. For example, we didn't know what the FBP means. Is it paid each month? Item 3 is something you are not going to receive; it's just for show. However, you also need to consider that from the basic salary, they will deduct ₹1800 per month as PF contribution. So, your take-home pay will be ₹42,717 or ₹18,435.

Flexible benefit plan is inclusive of monthly incentives that are target-based. If you meet your target 100%, then you would receive the full amount. Therefore, it varies according to target achievement.

242821 + 291385 - 29139 = monthly take-home

29139 will be a 12% deduction out of your salary. Gratuity is only eligible after completing 5 years. Annual fixed remuneration will be paid annually.

Thanks to all for helping me out. Please find the FBP distribution and help me in calculating my in-hand salary.

Flexible Benefit Plan (FBP)

This is valued at 120% of your Basic Salary. The FBP allows employees to choose a benefit basket that suits their needs. For certain elements, employees may avail of tax exemptions as per prevailing tax laws. The elements are listed below:

- (a) Leave Travel Allowance (LTA): LTA can be used for up to a maximum of economy class airfare twice during a 4-year period as per Income Tax rules.
- (b) Medical: INR 15,000/- per annum. To be used for medical expenses.
- (c) House Rent Allowance: Maximum 50% of Basic Salary per annum. To be used for house rent.
- (d) Conveyance Allowance: Maximum INR 800/- per month. To be used for vehicle expenses.
- (e) “Flat” Allowance: Remaining FBP funds and is a taxable amount.

Regards

Dear Renuka,

The monthly gross and take-home salaries should be 47916 and 44517, respectively, both before TDS. The good point here is that the FBP is high, which will save TDS considerably. Since TDS is also a factor of your investments, the net take-home (post TDS) is difficult to deduce. The gratuity of 971 monthly is a waste if you do not complete a minimum tenure of 4 years and 240 days as per laws.

Regards,
Sumeet Pattnaik

Renuka,

Please ask your company to provide you with the CTC breakup. What has been communicated to you is like a paper boat.

Basic: 20235
Medical: 15000
Conveyance: 800
HRA: 8482
Total: 44517

PF: 2428
Total: 42089

TDS: 25506
Take-home: 39963

Please verify as it may not match due to deductions like PT, EL, and additions such as Bonus or Incentive.

Regards,
Sarfaraz
Manager HR
Vardhman Pharma

Dear Renuka, Please do not disclose the name of the organization in an open forum. However, as you seek support to understand your take-home salary excluding ITAX and PTAX, if any, it may be as follows:

Salary Breakdown

Total yearly cash components = Basic-242,821 + FBP - 291,385 = 534,206 DIVIDED by 12 = 44,517/- per month. The distribution may be as follows: INR /MN.

- Basic: 20,235
- HRA: 10,115 (CLOSE TO 50% OF BASIC)
- CONV: 1,600 (As per new amendment of ITAX)
- MED: 1,250
- LTA: 2,523 (1.5 TIMES OF MONTHLY BASIC AS YEARLY)
- FLAT ALLOW: 8,794

Monthly Gross and Deductions

MONTHLY GROSS - 44,517 LESS PF-2,428 = 42,089/- TAKE HOME PER MONTH EXCLUDING ITAX AND PTAX IF ANY.

The above distribution based on your data may be adjusted a bit here and there.

Thanks and regards,

S K Bandyopadhyay

USD HR Solutions

[Email Removed For Privacy Reasons]

Your take-home salary before TDS should be Rs 42,089 per month. However, as suggested, the best way to inquire with IBM may differ from company to company.

Please let me know if you need further assistance.

Hi Renuka,

You may request your Finance or HR to enhance your conveyance allowance from Rs. 800 to Rs. 1,600 and deduct it from your flat allowance. This will help you reduce your tax liability. In fact, Mr. Nanu has already suggested this in your salary breakup but forgot to advise on the tax benefit. Your management has already quoted a conveyance amount of Rs. 800, which you need to discuss and get revised.

Regards,
Suresh

Dear Renuka, it is very simple. Whatever the emoluments/perks shown in your offer letter, divide them by 12. You will have a monthly salary of Rs. 44,517 (242,821 + 291,385 = 534,206 / 12), as shown by Mr. S K Bandyopadhyay. Only monthly PF (employee contribution) Rs. 2,428 will be deducted from that, and you will get Rs. 42,089.

Gratuity

The Gratuity shown in your offer will be due only if you work for 5 years in the company. If you leave before that, IBM may not pay you anything against Gratuity.

Tax Savings

You can save TDS (Tax deduction) after submitting relevant proof against:

• HRA (50% of Basic/Actual HRA paid/Actual HRA paid - 10% of Basic), (whichever is less)
• Medical Exemption/Allowance (15,000)
• Investment Savings (under 80C, up to Rs. 1.50 L)
• Conveyance Allowance Rs. 19,200 (No proof required)
• LTA Exemption

There could be other Tax Exemptions/Benefits as well. But all the above depends on whether you get the things adjusted in your Salary Structure properly. IBM, being such a reputed company, should have some in-built provisions in the accounting/salary process. IBM should clarify the matter at the time of offering you the letter.

As suggested by the fellow member and experts, lastly, consult the matter with your HR department.