Salary structure formula - what is the % of basic, HRA , Conveyance , LTA , Medical reimbursement?

Rasika Sapre
Hi, I am working in Manufacturing company. I just want to know about is there a criteria while making salary structure. If i want to offered 20,000/- gross salary what is the % of basic, HRA , Conveyance , LTA , Medical reimbursement.
nelsonthomas9102
Hi Rasika,
As the gross salary is at Rs.20,000/- you could please check if your company has to enable any ESI benefit for the employee under the ESI act, because under ESI coverage if the employee's monthly gross salary is at Rs.21,000/- or less, then mandatorily there would be employee (1% of gross) and employer ESI contributions (4%).
You need to check on PF coverage as well for the employee ( calculated at 12% on basic and other allowances if the basic salary is less than Rs.15,000/- per month ) and employer contributions (8.33%(EPS) + 3.67%(EPF)).
The basic can be at any %. But the HRA for tax exemption calculations could be set 40% of the basic salary if the employee works in a non-metro city and at 50% of the basic if the employee works at a metro city.
By medical reimbursement, I believe you would be referring to the medical allowance component to be added to the salary stack. The medical allowance and conveyance allowance would no longer be required, as there is now the standard deduction of Rs.40,000/- per annum for tax exemption.
If you are referring to medical reimbursement where you actually provide reimbursement based on medical bills provided by the employees, then you can add this in the CTC component.
For adding the LTA component, there is no fixed percentage for this.
Hope these details provide a bit of an idea on the stack.
bijay_majumdar
Rasikaji,
Under minimum wages act,every state has scheduled employment and its minimum basic wage in various categories of skills and areas or zones.For fixing the basic minimum salary as per the shedule of employment notifications issued by govt from time to time.Similarly DA /Special allowances is also declared by govt. Thus We can define basic and da,of emplloyee. Then as defined various allowances are adjusted within the defined % and entitlement etc.Further component of statutory compliance like epf,esi,pt lwf etc are accounted for calculating the gross amount of salary.
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