Let me help you to develop one CTC structure with PF included. Let us assume CTC for an employee 3 lakh per annum includes Basic -10,000/- per month, HRA, CONV, Monthly gross - 20,000/- per month Employer's portion of PF & ESI, Statutory Bonus as per Act, LTA - 20,000/-per annum, Mediclaim Insurance Premium - 3500/- per year, Group Personal Accident Insurance 1000 per annum. Employer's PF Contribution - @12% 10,000/- = 1200/- per month, ESI Employer's Contribution - @3.25 % 20,000/- = 650/- per month. Statutory Bonus on the basis of minimum wages 8.33% say 10,000/- per year. Total non payable amount to employee - 3500 +1000 +650 x 12+ 10,000 = 27450/- per year. Therefore total amount payable to employee - 3,00,000 - 27,450 = 2,72,550/- per year. Now 50% of this allowance = 50% @ 2,72,550/- = 136375/- per year and Basic is also 136375/- per year. Therefore, New monthly Basic will be 1,36,375 / 12 = 11,360 /- ( Rounded off). New PF Employer's contribution will be @12% of 11,360/- = 1363/- per month. Therefore, total allowances ( monthly and yearly) 11360 - 1363 - 10000/12 - 20,000/12 = 7497/- per month should be divided among HRA, CONV & any other yearly items.
If we make a back calculation , it will be Basic - 11,360/- per month ( 1,36320/- yearly), HRA,CONV & any other yearly Allowance 7497/( 89964/- yearly) , LTA- 20,000/- yearly, Bonus -10,000/- yearly , Insurance Premiums including ESI - 27,450/- YEARLY, PF Employer's contribution - 1363/- x 12 = 16356/- yearly. Therefore yearly CTC = 1,36,320 +89964 +20000 +10000 + 27450 +16356 = 3,00,090/-. Extra 90/- may be paid or may be adjusted against any allowances or against less Employer's contribution to ESI for less monthly gross.
All above calculations are made based on Wage codes "Wage " definition expected to be implemented from 01.04.2021.
S K Bandyopadhyay ( Howrah, WB)
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