Salary Calculation Confusion: Can Someone Explain the Steps Clearly?

rohini_mca
Hi friends,

Could you please explain in detail how to calculate a salary for an employee?
Amitmhrm
Hi Rohini,

The contents of the salary breakup may be as below. You can prepare it according to your own suitability. HRA would be 50% or 60% of the basic salary.

- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowance
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax

Gross Per Month = Sum of all the above.

Gross Per Annum = 12 * Gross/Month

PF Contribution = 12% of Basic/Annum

ESI Contribution = 4.75% of Gross/Annum

Medical = The mediclaim facility provided to employees not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Amounts exceeding this will be covered under Mediclaim or as per company policy.

EX-Gratia/Bonus = A fixed amount as Bonus

Annual Fixed Gross Cost = Gross/Annum + Ex-gratia

Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also known as CTC.

In addition to this, Food coupons, Holiday packages, and Furnishing items are included in their CTC.

I hope this information helps to clarify your queries to some extent.

Regards,
Amit Seth.
bahalpragati
Hi,

Please find the sheet attached for calculating the salary. Let me know if you find any difficulty.

Regards,
Pragati
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