Understanding LTA in CTC: How Do You Determine the Right Slab for Salary Breakups?

Dear Seniors,

Please help with determining the slab for the LTA component that is included in the CTC to calculate salary breakups.

Thank you.

Dear Janani Verma,

Please find enclosed information on LTA that was posted some time ago on the forum. I hope this is useful to you.

Regards,
Govil Nanda 😊

Hi Govil,

Thank you for providing information. Could you please let me know the slabs of LTA to calculate CTC for salary breakups, so that it can be included in the pay structure and pay slips? LTA is also a component of salary earnings.

Hi Janani,

LTA nowadays is included in CTC by most of the companies. It depends on your policy of LTA. If it's based on a year, then you have to divide the amount by 12 and place it on a monthly basis. If it's for 24 months, then divide by the same across 24 months.

The other option, if you wish to avail, is to give the employee the option to withdraw the total amount or in two installments on a six-month basis. Either way, it can be a part of CTC, and LTA mentioned twice in a year's payslip.

Hope this solves your query.

Regards,
AJ

Hi Think Jobs,

Thank you for your reply. Our company includes LTA in the CTC component. Could you please let me know by what percentage slab is LTA calculated over the basic salary for amounts above 10,000/- per month? For salaries below 10,000/-, it is calculated at 10% over the basic.

I look forward to your response.

Thank you.

Hi Janani,

I believe you will need to utilize the reverse process here. I assume you already have LTA slabs for employees based on their grades or positions within the firm. Please arrange to divide it by 12 or 24, whichever period you provide the LTA for, and then include it in the monthly salary.

Regards,
AJ