Understanding L.T.A. in CTC: How Do You Calculate and Include It in Employee Packages?

Dear Seniors,

Can you guide me in calculating L.T.A. in a CTC breakup? What can be the percentage or what is the criteria? I have to put this new component in the revised CTC of our employees. Please tell me how I can go about it.

Ratna

Hi,

There is no fixed proportion for LTA that you can allocate; it would be a part of your Flexible Benefits. It is a tax benefit provided by your company. Usually, Flexible Benefits constitute 30% of your Basic salary. LTA is the amount remaining after claiming for Medical & Conveyance, with the maximum limit for Medical being Rs. 15,000 per annum and Conveyance being Rs. 9,600. The remaining amount after claiming these two can be used for LTA.

Swetha