Hello Seniors,
I am working in IT company and we have recently initiated and involved in PF and ESI. The management has introduced a variable pay and it affects the PF monthly contribution. I have many doubts in the salary structure. Let me explain how the salary is calculated here and then go for the doubts.
1. Basic pay is calculated at 60% of Gross pay -
2. HRA is 50% of Basic pay
3. Rest of the gross pay is Special allowance (i.e 10%)
Gross Salary = Fixed and Variable (No percentage wise calculation, just some number) (22000+4000)
Deductions:
PF - 12%
ESI - 1.75%
PT -
Theses deductions are not included in the Gross pay.
My Doubts:
1. Basic can be 60% of GP?
2. Can we separate the variable pay from PF(PF only for fixed pay can be done)? If so, LOP has to be on FP.
3. HRA - Already the basic pay is high and how come the HRA can be calculated at 50 % of Basic pay.
4. If I include the deduction amount in Gross pay, then the entire number will change. Should I do that or ignore it.
Hope I explained it clearly. Please do help me on this.
I am working in IT company and we have recently initiated and involved in PF and ESI. The management has introduced a variable pay and it affects the PF monthly contribution. I have many doubts in the salary structure. Let me explain how the salary is calculated here and then go for the doubts.
1. Basic pay is calculated at 60% of Gross pay -
2. HRA is 50% of Basic pay
3. Rest of the gross pay is Special allowance (i.e 10%)
Gross Salary = Fixed and Variable (No percentage wise calculation, just some number) (22000+4000)
Deductions:
PF - 12%
ESI - 1.75%
PT -
Theses deductions are not included in the Gross pay.
My Doubts:
1. Basic can be 60% of GP?
2. Can we separate the variable pay from PF(PF only for fixed pay can be done)? If so, LOP has to be on FP.
3. HRA - Already the basic pay is high and how come the HRA can be calculated at 50 % of Basic pay.
4. If I include the deduction amount in Gross pay, then the entire number will change. Should I do that or ignore it.
Hope I explained it clearly. Please do help me on this.