How Do I Calculate My Pay with Additional Allowances Over the Years?

I am on consolidated pay, and my pay is Rs.15,000 per month. I am receiving additional allowances like a One-Time Special Allowance of Rs.4000 and Additional Service Allowance with the following formulation:

- For completion of 3 years of service: Rs.1000
- For completion of 5 years of service: Rs.2000
- For completion of 7 years of service: Rs.3000
- For completion of 10 years of service: Rs.4000

Could anyone let me know how to calculate my pay according to the given structure upon completion of service at 3 years, 5 years, 7 years, and 10 years?

For example, will it be like:

- 15000 + 4000 + 1000 = Rs.20,000 for 3 years
- 15000 + 4000 + 2000 = Rs.21,000 for 5 years
- 15000 + 4000 + 3000 = Rs.22,000 for 7 years
- 15000 + 4000 + 4000 = Rs.23,000 for 10 years

Or

- 15000 + 4000 + 1000 = Rs.20,000 for the 3rd year
- 20,000 + 2000 = Rs.22,000 for the 5th year
- 22,000 + 3000 = Rs.25,000 for the 7th year
- 25,000 + 4000 = Rs.29,000 for the 10th year on consolidated pay

Understanding One-Time Allowance and Additional Service Allowance

One-Time Allowance means an allowance paid only once, and it will not form part of the salary. Additional Service Allowance is like an increment. As per your contract of employment, for the first three years, you will receive a salary of Rs. 15,000. After completing three years, your salary will increase to Rs. 16,000, which will continue for another two years. Upon completing five years, you will receive another increment (referred to as Additional Service Allowance by your employer) of Rs. 2,000, making the salary Rs. 18,000. This pattern will persist for another two years, and after a total of seven years, the salary will rise to Rs. 21,000. This will continue for three years, and upon completing ten years, the salary will be Rs. 25,000.

Clarification on Increment Patterns

Typically, there should be an increment every year, leading to a cumulative effect. The One-Time Special amount is paid only once a year. If the employer is distributing this 'one-time' component every month, ideally, you should currently be receiving Rs. 19,000. After three years, this should increase to Rs. 20,000, and after five years, it should become Rs. 22,000, and so forth.

You need to clarify what the term 'One-Time' refers to and confirm whether you are currently receiving it monthly.

Dear Madhu T.K.,

Thank you for your response. Yes, I am receiving my One-Time Special Allowance each month. However, regarding the Additional Service Allowance, in the 3rd year, I received 15,000 + 4,000 + 1,000 = 20,000. After completing 5 years of service, my office is calculating it differently: 15,000 + 4,000 + 2,000 = Rs. 21,000 and providing the same amount. They are not calculating it as 20,000 + 2,000 = Rs. 22,000. Can I question them and take legal action if they refuse to provide the consolidated pay and instead split the amount, causing myself and my staff to lose pay? Please advise.

Thank you.

If you are in receipt of a 'one-time' payment every month, it should be part of your salary. The salary should be Rs 19,000 for the first three years, then increase to Rs 20,000 for the 3rd and 4th years, and finally become Rs 22,000 from the fifth year onwards. The scale is always cumulative, and the increment is added to the existing base salary.

You can inquire with the HR department about this matter. Sometimes, it may be due to ignorance that the Personnel Officer is handling the situation this way. If you do not receive a satisfactory answer, legal action could be an option, although it is not recommended from my side. It is advisable to review the minimum wages notification by the government and the provisions related to salary as per your appointment order. There may be a misinterpretation of the compensation being provided, which needs clarification.