Salary Proration Dilemma: Should We Use CTC or Gross for New Joiners?

Hi,

One of our employees joined on the 15th of August. His CTC is 20k, and his gross will be 18k. Please let me know on which figure (CTC/GROSS) we need to do prorate calculations.

Regards,
Athidhi

Hello,

The employee joined in the midst of a month. His salary will be prorated based on his monthly salary, not the CTC. Some benefits in the CTC are applicable only upon completion of certain conditions like attendance, salary, and service, etc. If the employee works for the full month, the salary will be calculated as a prorated amount of that total.

Vibhakar Ramtirthkar
9371001906
snehvibha@yahoo.com

The monthly salary is always prorated based on the gross salary and not the yearly or monthly CTC. By the way, 15th August is a nationwide holiday. If you were working on that day, please ensure that you pay double salary for 15th August.

Regards,

What you pay to an employee is gross, not CTC. CTC includes a number of facilities and perks that the employee gets. Please tell me how you will divide or separate those perks pro rata and how you would recover the cost for those.

For example, his CTC includes training costs or the cost of transport to the office. How will you recover a part of that cost from his salary?

Dear Athidhi,

You must treat his/her joining date as 16th August and the salary should be calculated in the following manner: 18000/30*16.