Hi all, Can anybody guide me in CTC designing when package is known. I want to know about the calculation of leave salary and gratuity into that. Thanks Shweta
From India, Pune
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From India, Pune
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For your kind information CTC does not include leave encashment and gratuity Regards, R.Ramkishore
From India, Bangalore
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53From India, Bangalore
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Greetings,
I presume you are working on the complete designing of a salary structure. Leaves are generally encashed at the time of separation. They are calculated based on the basic pay per day, i.e., basic pay for the month divided by 22 days, considering the standard five days of work in a week. In case it is a six-day workweek, it would be 26 days.
Gratuity is calculated as shared below per the Payment of Gratuity Act, 1972:
Object: The Act provides a scheme for the payment of gratuity to employees engaged in various establishments such as factories, mines, oilfields, plantations, ports, railway companies, and shops.
Applicability: Any employer in the listed establishments where 10 or more persons are employed or were employed in the preceding 12 months is liable to pay gratuity to its employees. Once the Act becomes applicable, it remains in force even if the number of employees falls below ten.
Entitlement: Gratuity is payable to an employee (or nominee in case of the employee's death) who has completed five years or more of continuous service upon termination of employment, superannuation, retirement, or resignation. Completion of five years of continuous service is not required if the termination is due to death or disablement.
Calculation: W x Y x 15/26, where W = Last Wage drawn (basic + DA), Y = number of completed years of continuous service (rounding off six months or less and considering more than six months as a full year), 15 = 15 days' salary, 26 = Number of working days in a month.
Maximum Limit: Rs. 3.5 lakhs (w.e.f 24-09-1997).
Time Limit for application to employer: Employees must submit an application in Form-I to their employer within 30 days from the date the gratuity becomes payable.
To calculate the gratuity: it follows the formula - Number of years of service x Last salary drawn (Basic+D.A) x 15/26.
Please do consider the following links while working on the structure:
- [CTC Rs. 1,00,000 PM](https://www.citehr.com/227160-ctc-rs-1-00-000-pm.html)
- [Incentive Package for BPO Employees](https://www.citehr.com/98502-incentive-package-bpo-employees.html)
Regards,
(Cite Contribution)
From India, Mumbai
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I presume you are working on the complete designing of a salary structure. Leaves are generally encashed at the time of separation. They are calculated based on the basic pay per day, i.e., basic pay for the month divided by 22 days, considering the standard five days of work in a week. In case it is a six-day workweek, it would be 26 days.
Gratuity is calculated as shared below per the Payment of Gratuity Act, 1972:
Object: The Act provides a scheme for the payment of gratuity to employees engaged in various establishments such as factories, mines, oilfields, plantations, ports, railway companies, and shops.
Applicability: Any employer in the listed establishments where 10 or more persons are employed or were employed in the preceding 12 months is liable to pay gratuity to its employees. Once the Act becomes applicable, it remains in force even if the number of employees falls below ten.
Entitlement: Gratuity is payable to an employee (or nominee in case of the employee's death) who has completed five years or more of continuous service upon termination of employment, superannuation, retirement, or resignation. Completion of five years of continuous service is not required if the termination is due to death or disablement.
Calculation: W x Y x 15/26, where W = Last Wage drawn (basic + DA), Y = number of completed years of continuous service (rounding off six months or less and considering more than six months as a full year), 15 = 15 days' salary, 26 = Number of working days in a month.
Maximum Limit: Rs. 3.5 lakhs (w.e.f 24-09-1997).
Time Limit for application to employer: Employees must submit an application in Form-I to their employer within 30 days from the date the gratuity becomes payable.
To calculate the gratuity: it follows the formula - Number of years of service x Last salary drawn (Basic+D.A) x 15/26.
Please do consider the following links while working on the structure:
- [CTC Rs. 1,00,000 PM](https://www.citehr.com/227160-ctc-rs-1-00-000-pm.html)
- [Incentive Package for BPO Employees](https://www.citehr.com/98502-incentive-package-bpo-employees.html)
Regards,
(Cite Contribution)
From India, Mumbai
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Dear Sir,
Kindly check the below attached CTC design being followed by my company and let me know if it is correct or incorrect.
Person 1:
Basic: 6650
HRA: 2660
Conveyance: 800
Special Allowance: 3190
Gross Salary: 13300
PF Employer: 885
ESI Employer: 632
Bonus: 554
Leave: 256
CTC: 15627
Salary in hand: 12287 (Gross salary - PF employee - ESI employee)
(13300 - 780 - 233)
Thank you.
From India, New Delhi
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Kindly check the below attached CTC design being followed by my company and let me know if it is correct or incorrect.
Person 1:
Basic: 6650
HRA: 2660
Conveyance: 800
Special Allowance: 3190
Gross Salary: 13300
PF Employer: 885
ESI Employer: 632
Bonus: 554
Leave: 256
CTC: 15627
Salary in hand: 12287 (Gross salary - PF employee - ESI employee)
(13300 - 780 - 233)
Thank you.
From India, New Delhi
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Dear All, Kindly let me know can we keep fixed basic CTC same for all the employees working in the organisation? Do we have any provision in Minimum wages act for minimum basic salary?
From India, Pune
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From India, Pune
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Some companies are following Gratuity as a part of CTC, while others not. It depends on the company ctc structure. Folllow your company norms. Thanks srinivas
From India, Hyderabad
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From India, Hyderabad
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Dear Peer,
CTC designing varies from company to company. Companies plan their salary structure based on their processes and functions. For example, if a company deals with FMCG goods, they pay close attention to attendance, and the percentage of leave taken is also very low. Employees are not supposed to take maximum leaves for their convenience, and Saturdays and Sundays are major constraints for them.
In some companies, the incentive structure might be the basis for the salary structure. However, generally, the salary comprises:
- Basic: 40% of CTC
- HRA: 50% and 40% for Second-tier cities
- Other allowances based on your designation
Deductions include:
- ESI: 1.75% of Basic
- PF: 12% of Basic
- Other LOP
The net salary is the gross salary minus deductions.
Regards,
Nelson S.
Chennai
From India, Bangalore
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CTC designing varies from company to company. Companies plan their salary structure based on their processes and functions. For example, if a company deals with FMCG goods, they pay close attention to attendance, and the percentage of leave taken is also very low. Employees are not supposed to take maximum leaves for their convenience, and Saturdays and Sundays are major constraints for them.
In some companies, the incentive structure might be the basis for the salary structure. However, generally, the salary comprises:
- Basic: 40% of CTC
- HRA: 50% and 40% for Second-tier cities
- Other allowances based on your designation
Deductions include:
- ESI: 1.75% of Basic
- PF: 12% of Basic
- Other LOP
The net salary is the gross salary minus deductions.
Regards,
Nelson S.
Chennai
From India, Bangalore
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Dear All, CTC will be vary from company to company. kindly check the below attached ctc design in xl format being followed by my company. tell me it is right or wrong. regards mselvame
From India, Madras
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From India, Madras
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Gratuity-Leave calculation on CTC-Rev..xls