Understanding Salary Breakdown: How to Calculate Basic, HRA, and CCA for Restructuring?

Hi,

It would be good if anybody could shed light on the following:

1) If the total CTC per month is Rs. 30,000, how much would the basic salary be? Is there any legal specification? Does the basic salary need to be 35% of the total CTC?

2) What would be the amount of the HRA? Is there any legal specification?

3) What would be the CCA or the City Compensatory Allowance? As far as I know, the amount varies from one metro to another. Please inform me about the different rates.

I need your help urgently as I am restructuring the pay structure of our company.

Thanks and regards,
Ayona

Hello,

Can anybody help me with the salary structure of their company, which includes variable benefits as well? I need it in a proper format. Kindly assist me.

Regards,
Priya

Hi Priya,

As per your request, I am forwarding the different salary structures, i.e., <Rs. 10000 and >Rs. 10000, in the attachment, which you want. Please go through the same and send your comments on that.

Krishna

Hi Krishna,

Thank you for your immediate response. However, I am in need of a structured plan that includes a variable component, such as incentives that employees can earn based on their performance. Therefore, I am looking for a structure that outlines both fixed salaries and variable incentives.

Your prompt attention to this matter is greatly appreciated.

Best regards,
[User's Name]

Dear Ayona,

You can have any combinations. These components of the salary are designed to minimize tax. Almost all the allowances like HRA, Medical, etc., are in terms of a percentage of the basic. If you keep the basic amount low, the allowances will be affected accordingly, and the employees will receive fewer benefits.

Thanks and Regards, Anand Rathi

Hi Ayona,

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

- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement/Month

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 is provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. If the medical expenses exceed this amount, it will be covered under Mediclaim or as per company policy.

Ex-Gratia/Bonus = A fixed bonus amount.
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also known as CTC.

I hope this clarifies the details for you. If you have any queries, please feel free to ask.

Regards,
Amit Seth.