Understanding Monthly CTC of $21,000: How to Exclude ESI and Include PF and Welfare Contributions?

Dear professionals,

Could someone provide a breakdown for a monthly CTC of $21,000, considering the following factors:

1) Excluding employees from ESI benefits.
2) Including PF and Welfare contributions.

Please let me know if additional information is needed to provide a detailed breakdown.

Understanding CTC and ESI Exclusions

What do you mean by CTC? Is it the gross salary plus the employer's contributions towards PF, ESI, bonus, and gratuity? If so, then the gross salary would be much lower than Rs 21,000. How can you exclude the employee from ESI in this case? The only allowances that can be excluded for ESI are traveling allowance and washing allowance. The latter can be excluded only if you provide a uniform to the employees. How can you then exclude them from ESI?

In respect of such employees (employees in the salary brackets of less than $25,000, say), it is always fine if you follow a pattern of salary structure as given in the minimum wages notification. It shall contain a basic salary and dearness allowance, and the same can be used for future calculation of gratuity without any litigations.

Without minimum wages, the CTC breakup is not correct. But I am giving you an example -

Basic Salary

Basic - 10500 (50% of your CTC). Basic salary should never be less than minimum wages.

House Rent Allowance (HRA)

HRA - 4200 (Basic * 40% or 50%)

Medical Allowance

Medical - 1250

Conveyance Allowance

Conveyance - 1600

Other Allowance

Other allowance - 3450

Total CTC

Total - 21000

Hi Priya S Lakshmi,

To provide a detailed breakdown of a monthly Cost to Company (CTC) of 21,000, we'll consider the following components:

Basic Salary
This is the fixed component of the salary and is usually a significant part of the CTC. It forms the basis for other components like PF and Gratuity.

House Rent Allowance (HRA)
If applicable, HRA is a portion of the salary paid to cover the cost of accommodation. It is usually a percentage of the basic salary.

Conveyance Allowance
This is an allowance provided to employees to cover their commuting expenses.

Special Allowance
This can include any additional allowances that are not covered by other categories.

Provident Fund (PF)
Both the employer and employee contribute to the PF fund. The contribution is a percentage of the basic salary. Note that you mentioned including PF contributions in the CTC, so we'll need to calculate both the employer's and employee's contribution.

Welfare Contributions
This could include contributions towards employee welfare funds or schemes.

Since you've mentioned excluding employees from ESI benefits, we won't consider Employee State Insurance in this breakdown.

Now, let's break down the CTC of 21,000. Keep in mind that the actual amounts may vary depending on the company's policies and the individual's specific circumstances:

Basic Salary
This can vary, but let's assume 40% of the CTC, which would be 8,400.

HRA
This is usually around 40-50% of the basic salary, but can vary depending on the city. Let's assume 40%, which would be 3,360.

Conveyance Allowance
This is usually a smaller portion, around 800.

Special Allowance
The remaining portion of the CTC after accounting for the above components can be considered as the special allowance. In this case, it would be 8,440.

Provident Fund (PF)
Employee's Contribution: This is typically 12% of the basic salary. In this case, it would be 1,008.
Employer's Contribution: This is also typically 12% of the basic salary. So, it would be another 1,008.

Welfare Contributions
This can vary widely depending on the specific policies of the company. Without more information, it's hard to provide an exact figure.

Please note that these are rough estimates and actual numbers can vary based on company policies, location, and specific benefits provided. If you have specific percentages or policies from your company, you can use those for a more accurate breakdown.

Regards,