How To Calculate Salary Break Up From Take Home Salary?

saru.bhar
Hi all,
I want to know how to calculate salary breakups like Basic, HRA, EA, etc from take home salary of a candidate (not from CTC of a person). For example if a candidate's Take home salary has been fixed as Rs. 10000 PM, how to frame salary break up from that?
Anand Anil
Salary breakup is a critical part of compensation management. My suggestion is what so ever is agreed by the management to be paid to an employee should have following components
Basic salary minimum 50 %
HRA 40 to 50% of Basic salary
Conveyance Allowance = Amount exempt from Income tax for attending daily duty.
Balance amount can be given any terminology depending upon location as some amounts are non taxable in certain areas.
Please note that minimum wages prescribed by the state government should not be bifurcated further to avoid EPF and ESI contributions as these are need based wages.
Plan your structure accordingly.
Regards
saru.bhar
Can we calculate Basic, HRA, EA, Coveyance allowance from Net pay (i.e. Take home salary)?
gadekarlina
Hi,
Below is the rough calculation for 10000 net pay.
Particulars of Compensation Per Month
Basic 5000
HRA 2000
Conveyance Allowance 1600
Special allowance 2200
Food Allowance 200
Vehicle Allowance -
Gross 11000
Deductions
PF (12% of Basic) 600
ESIC (1.75% of Gross) 193
PT 200
Total Deduction 993
Net Pay-Take Home(Gross - Total Ded) 10007
saru.bhar
Thank you Gadekarlina. Can you please share me the calculation for the same in Excel format (with formulas & calculation), it will be very useful for me..
gadekarlina
Hi,
Please find the attached CTC structure in Excel format.
Regards
Lina
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