In the provided service contract, the appointment letter is referred to as a service contract. This terminology is often used interchangeably in organizations to outline the terms and conditions of employment. The service contract serves as a legal document that specifies the relationship between the employer and the employee, detailing rights, responsibilities, and obligations during the employment period.
Breakdown of Salary Components:
The salary components outlined in the annexure are structured as follows:
1. Basic Salary: ₹1,19,400
2. House Rent Allowance: ₹47,760
3. Transport Allowance: ₹19,200
4. Total Medical Allowance: ₹15,000
5. Total Special Allowance: ₹89,544
6. Annual Bonus: ₹24,242
7. Contribution to Provident Fund: ₹14,328
8. Accidental Insurance: ₹400
Total Fixed Pay (a): ₹2,90,904
Total Variable Pay and Additional Benefits (b): ₹38,970
Annual Cost to Company (CTC): ₹3,29,874
- The breakup of the CTC is calculated based on a combination of fixed and variable components. The fixed pay includes basic salary, allowances, and contribution to provident fund, while the variable pay consists of the annual bonus and additional benefits.
- The CTC represents the total cost incurred by the employer for employing the individual, encompassing both fixed and variable elements of the compensation package.
- The percentage basis for the breakup of salary components is determined by the organization's remuneration policy and may vary based on factors such as industry standards, market conditions, and individual performance.
It's essential to review the specific terms and conditions mentioned in the service contract to understand the complete details of the employment agreement and the associated compensation structure.