There may be monthly gross wages or yearly CTC. As per new labor codes ( yet to implement) the definition of wages ( common in all labor codes ) has been provided guide line to split Total payable amount. One may follow the same - may not be toto at this moment but to some extend.
As per the definition there are 3 steps to determine wages ( Basic and DA ) and other allowances including employer's portion of PF, Statutory Bonus etc. If we read the definition properly it is mentioned that there is exclusion list (a) to (k) of which payment under (a) to (i) should not be more than 50% of the all remuneration calculated under this clause (definition of wages ).
It may be started from CTC of each employee ( which is random vary from organization to organization in India ) to determine the all remuneration which is payable to employee. For example employer's portion of ESI contribution, Premium to insurances etc. may be subtracted from the CTC.
As labor codes are not yet implemented, one may consider 40% of the all remuneration which is payable to employee as Basic & DA at this stage ( which will be 50% after implementation of labor codes ) and rest amount will be distributed to pockets as per organization's policy - employer portion of PF, Statutory Bonus, HRA, LTA etc. This will help to fulfill the conditions of definition of wages easily after it is implemented.
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
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