How to Break Down a 4,20,000 Annual Salary for a Small IT Firm Without PF?

rekha-vemula
Hi, can anyone provide me with the detailed salary breakup for an annual salary of 4,20,000, i.e., 35,000 per month? This is for a small IT firm with 6 employees and does not include PF. The details need to be mentioned in the offer letter as an annexure, so please provide a detailed breakdown.

Thanks in advance.
loginmiraclelogistics
Hi Rekha,

A model CTC is attached. Please adopt it with any modifications required to suit your policy.
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rekha-vemula
Thank you, Kumar. In the annexure of the offer letter, if it is mentioned as below, is that fine? Can you please let me know? Thanks in advance.

BASIC: 21000 (pa) 17500(pm)
FDA/VDA: 105000 (pa) 8750(pm)
HRA: 42000 (pa) 3500(pm)
MEDICAL: 10000 (pa) 833(pm)
CONVEYANCE: 18000 (pa) 1500(pm)
OTHER ALLOW: 35000 (pa) 2917(pm)
Total: 420000 (pa) 35000(pm)

Thanks and Regards,
Rekha.
loginmiraclelogistics
Importance of a Remuneration Policy

It's a sound official practice to first get your remuneration policy right. As a private firm, you'll have the liberty to alter your structure as and when required. However, when you make it a policy framework, such an administration can help you in the future to make appropriate decisions.

Key Considerations for Remuneration Policy

i) Keep track of the state's minimum wage stipulations.

ii) Monitor the trend in the salaries of other competitors in the same sector.

iii) There is nothing wrong with keeping the structure flexible to meet compulsions. At the same time, keep them commonly applicable to all item-wise. The amounts may vary from person to person and status. For example, instead of conveyance, you may introduce petrol allowance at actuals for senior members who use cars, lunch allowance/food coupons for all, entertainment allowance, or reimbursement of business promotional expenses for those involved in direct customer rapport, etc.

iv) Observe statutory requirements in letter and spirit - remittance of Prof. Tax/TDS, maintenance of records, submission of reports, and returns, etc.

v) You are free to, if necessary, add or delete components in the structure without tinkering with the basics.

Salary Structure Recommendations

The Basic should be Rs. 2,10,000 (per annum), others are okay. I believe you are finalizing the package on a CTC basis. If yes, you may have to consider revealing other 'annual charges/components' to make up the CTC package.

All the best.
taisha-prabhakar
Dear everyone,

I want to know how to divide a salary of Rs. 18,000 and Rs. 8,000 when there is no PF deduction, as the firm has below 15 employees, and most of us live in our own houses. What must be the basic salary, and can dearness allowance be availed by a private sector employee, or is it just for government employees? Also, please provide me with more information about medical allowance.

Please help me. Thanks in advance.
taisha-prabhakar
My firm's policy does not include any medical benefits, as I have mentioned in the above comment. Could anyone please suggest how the salary division can be done in a way that is helpful for employees to avail loans at any time and also manage other work with the help of salary statements? Additionally, could you inform me about which part of the divided salary is typically reviewed by a bank before providing loans?

Thanks and regards
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