I am working as an HR professional in an electrical company, and I am new to this industry. I need to prepare a salary structure for an engineer whose gross salary is 25,000/-. I am confused because our consultant has provided me with a different structure. Could you please suggest a suitable salary structure?
Regards,
Anjali
From India, Mumbai
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1Regards,
Anjali
From India, Mumbai
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Dear Anjali Refere the min wages act uare maintaing wrong salary structure, if u need any calrifications can contact, if u are in Hyd will visit u r office will guide Lakshmi 9866917232
From India, Hyderabad
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From India, Hyderabad
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Our consultant provided me with the following structure. Is it correct? Please provide your comments.
Salary Structure
Sr. No. Description Amount
Monthly Payment
1. Basic Wages 5800.00
2. Special Allowances 1004.40
A. Total 6804.40
3. House Rent Allowances 5% 340
4. Conveyance 1500.00
5. Travelling Allowance 7500.00
6. Other Allowances 8855.00
B. Total 25000
Statutory Deduction
1. Provident Fund (@12%) 817
2. E S I C (@1.75%) Insurance 437
3. Labour Welfare Fund 4.00
4. Professional Tax 200.00
C. Total 1458.02
Net Monthly Payment 23542
Statutory Payment
1. Provident Fund (@13.61%) 926.08
2. E S I C (@4.75%) Insurance 1187.48
3. Labour Welfare Fund 6.00
D. Total 2120
Net Annual Payment
1. Bonus 8.33% 0.00
E. Total 0.00
1. Leave Wages 0.00
Gratuity 0.00
F. Total 0.00
Direct Cost To Company
Uniform, Shoes 0.00
CTC 27119.18
Thank you.
From India, Mumbai
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Salary Structure
Sr. No. Description Amount
Monthly Payment
1. Basic Wages 5800.00
2. Special Allowances 1004.40
A. Total 6804.40
3. House Rent Allowances 5% 340
4. Conveyance 1500.00
5. Travelling Allowance 7500.00
6. Other Allowances 8855.00
B. Total 25000
Statutory Deduction
1. Provident Fund (@12%) 817
2. E S I C (@1.75%) Insurance 437
3. Labour Welfare Fund 4.00
4. Professional Tax 200.00
C. Total 1458.02
Net Monthly Payment 23542
Statutory Payment
1. Provident Fund (@13.61%) 926.08
2. E S I C (@4.75%) Insurance 1187.48
3. Labour Welfare Fund 6.00
D. Total 2120
Net Annual Payment
1. Bonus 8.33% 0.00
E. Total 0.00
1. Leave Wages 0.00
Gratuity 0.00
F. Total 0.00
Direct Cost To Company
Uniform, Shoes 0.00
CTC 27119.18
Thank you.
From India, Mumbai
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Anjali, In the beginning you are writting Gross salary 25000/- now your consultant it is showing 27119.18 pl check and revert.
From United States
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From United States
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correct dinshan. Actually Gross 25,000 and nett salary comes 23542 . But CTC comes 27119.18. It’s ok. CTC means all expenses to that employees.
From India, Selam
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From India, Selam
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Yes, you are right, the gross salary is 25,000/-. Basic and special allowances are as per the Minimum Wages Act. However, I request everyone to please suggest a salary structure as I am confused about the statutory deductions provided by our consultant.
Regards,
Anjali
From India, Mumbai
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Regards,
Anjali
From India, Mumbai
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Hi, for calculating CTC employers contribution is required so that our consultant suggest me to take the Statuary payment in salary structure
From India, Mumbai
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From India, Mumbai
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Dear Anjali, I think your full salary structure is wrong and i dont know how Esi comes for Rs.25000/- in gross. Best Regards, Suresh.K
From Singapore
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From Singapore
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hi, Ya you are right, ESIC Ceiling is 15000 gross. above structure s provided by our consultant, so pls if possible suggest me the salary structure. Regards Anjali
From India, Mumbai
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From India, Mumbai
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Hi anjali Your Pf Calculation Salary (Basic wages + Special Allowance 5800+1004.4) 6804.4*12% =816.528 ESI Salary Gross Salary 25000 *1.75% = 437.5 Labour Welfare = 4 Professional Tax = 200
From India, Kottayam
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From India, Kottayam
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Dear, Pls note this simple salary structure Basic 50% HRA 20% Conv 20% and SP. Allowance 10% Best Regards, Suresh.K
From Singapore
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From Singapore
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Payslip for the Month of May 2012
Employee No: Location
Name: Department
Bank Name: Designation
Bank Acc. No.: Division
PF No.: Total Days 31
ESI No.: LOP 0
PAN No.: Effective Work Days 31
Earnings and Deductions
- **Earnings (Rs.):**
- BASIC: 9000
- BASIC ARREAR: 1004
- HRA: 3600
- HRA ARREAR: 402
- TRAVELLING ALLOWANCE: 800
- VARIABLE ALLOWANCE: 2570
- VARIABLE ALLOW ARREAR: 602
- INCENTIVE: 4205
- MEDICAL REIMBURSEMENT: 1250
- BONUS: 3500
- HUL INCENTIVE: 335
- Total Earnings: 27268
- **Deductions (Rs.):**
- PROVIDENT FUND: 780
- PROF TAX: 200
- STAFF LOAN: 3190
- Total Deduction: 4170
Net Pay: Rs. 23098.20 (Rupees Twenty Three Thousand Ninety Eight And Twenty One Paise Only)
Employer's Contribution
- Employer's PF: 780
- Employer's ESI: 0
- Gross: 28048
My Question
Total Salary as per company: 28048
Deduction of PF: 1560
26488
D14-d23: 23878
Double time PF: 23098
What is the rule to deduct the PF, and how much are they deducting as per this information? How much does the company need to pay the PF to the employee, and how can we know that they are paying that amount to the PF account of the employee?
From India, Bangalore
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Employee No: Location
Name: Department
Bank Name: Designation
Bank Acc. No.: Division
PF No.: Total Days 31
ESI No.: LOP 0
PAN No.: Effective Work Days 31
Earnings and Deductions
- **Earnings (Rs.):**
- BASIC: 9000
- BASIC ARREAR: 1004
- HRA: 3600
- HRA ARREAR: 402
- TRAVELLING ALLOWANCE: 800
- VARIABLE ALLOWANCE: 2570
- VARIABLE ALLOW ARREAR: 602
- INCENTIVE: 4205
- MEDICAL REIMBURSEMENT: 1250
- BONUS: 3500
- HUL INCENTIVE: 335
- Total Earnings: 27268
- **Deductions (Rs.):**
- PROVIDENT FUND: 780
- PROF TAX: 200
- STAFF LOAN: 3190
- Total Deduction: 4170
Net Pay: Rs. 23098.20 (Rupees Twenty Three Thousand Ninety Eight And Twenty One Paise Only)
Employer's Contribution
- Employer's PF: 780
- Employer's ESI: 0
- Gross: 28048
My Question
Total Salary as per company: 28048
Deduction of PF: 1560
26488
D14-d23: 23878
Double time PF: 23098
What is the rule to deduct the PF, and how much are they deducting as per this information? How much does the company need to pay the PF to the employee, and how can we know that they are paying that amount to the PF account of the employee?
From India, Bangalore
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Payslip for the Month of May 2012
Employee No: Location
Name: Department
Bank Name: Designation
Bank Acc. No.: Division
PF No.: Total Days: 31
ESI No.: LOP: 0
PAN No.: Effective Work Days: 31
Earnings and Deductions
- **Earnings (Rs.):**
- BASIC: 9000
- BASIC ARREAR: 1004
- HRA: 3600
- HRA ARREAR: 402
- TRAVELLING ALLOWANCE: 800
- VARIABLE ALLOWANCE: 2570
- VARIABLE ALLOW ARREAR: 602
- INCENTIVE: 4205
- MEDICAL REIMBURSEMENT: 1250
- BONUS: 3500
- HUL INCENTIVE: 335
- **Total Earnings:** 27268
- **Deductions (Rs.):**
- PROVIDENT FUND: 780
- PROF TAX: 200
- STAFF LOAN: 3190
- **Total Deduction:** 4170
Net Pay: Rs. 23098.20 (Rupees Twenty-Three Thousand Ninety-Eight and Twenty-One Paise Only)
Employer's Contribution
- Employer's PF: 780
- Employer's ESI: 0
- Gross: 28048
My Question
Total Salary as per company: 28048
Deduction of PF: 1560
26488
D14-d23: 23878
Double time PF: 23098
What is the rule to deduct the PF, and how much are they deducting as per this information? How much does the company need to pay the PF to the employee, and how can we know that they are paying that amount to the PF account of the employee?
See the attachment and
Correct Spelling and Grammar: Identify and fix any spelling or grammatical mistakes in the text.
From India, Bangalore
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Employee No: Location
Name: Department
Bank Name: Designation
Bank Acc. No.: Division
PF No.: Total Days: 31
ESI No.: LOP: 0
PAN No.: Effective Work Days: 31
Earnings and Deductions
- **Earnings (Rs.):**
- BASIC: 9000
- BASIC ARREAR: 1004
- HRA: 3600
- HRA ARREAR: 402
- TRAVELLING ALLOWANCE: 800
- VARIABLE ALLOWANCE: 2570
- VARIABLE ALLOW ARREAR: 602
- INCENTIVE: 4205
- MEDICAL REIMBURSEMENT: 1250
- BONUS: 3500
- HUL INCENTIVE: 335
- **Total Earnings:** 27268
- **Deductions (Rs.):**
- PROVIDENT FUND: 780
- PROF TAX: 200
- STAFF LOAN: 3190
- **Total Deduction:** 4170
Net Pay: Rs. 23098.20 (Rupees Twenty-Three Thousand Ninety-Eight and Twenty-One Paise Only)
Employer's Contribution
- Employer's PF: 780
- Employer's ESI: 0
- Gross: 28048
My Question
Total Salary as per company: 28048
Deduction of PF: 1560
26488
D14-d23: 23878
Double time PF: 23098
What is the rule to deduct the PF, and how much are they deducting as per this information? How much does the company need to pay the PF to the employee, and how can we know that they are paying that amount to the PF account of the employee?
See the attachment and
Correct Spelling and Grammar: Identify and fix any spelling or grammatical mistakes in the text.
From India, Bangalore
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I think the Engineer does not comes under ESI bracket.so, ESI contribution should not be deducted. Puja
From India, New Delhi
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From India, New Delhi
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The salary break up seems to be wrong as the basic salary is so less and ESI is not applicable to employees whose salary is more than 15000/-
From India, Hyderabad
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From India, Hyderabad
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Salary Structure Details
Without deductions:
- Basic Salary: 40% - 10,000
- HRA: 30% - 7,500
- Convenience: 800 (Fixed) - 800
- Special Allowances - 6,700
- Gross Salary - 25,000
With deductions:
- Basic Salary: 40% - 10,000
- HRA: 30% - 7,500
- Convenience: 800 (Fixed) - 800
- Special Allowances - 6,700
- PF - 780
- ESIC - 0
- Food Coupons - 1,000
- TDS - 0
- In hand - 23,220
Regards,
Ashok Negidi
HR-Hyderabad
M: [Phone Number Removed For Privacy Reasons].
From India, Hyderabad
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Without deductions:
- Basic Salary: 40% - 10,000
- HRA: 30% - 7,500
- Convenience: 800 (Fixed) - 800
- Special Allowances - 6,700
- Gross Salary - 25,000
With deductions:
- Basic Salary: 40% - 10,000
- HRA: 30% - 7,500
- Convenience: 800 (Fixed) - 800
- Special Allowances - 6,700
- PF - 780
- ESIC - 0
- Food Coupons - 1,000
- TDS - 0
- In hand - 23,220
Regards,
Ashok Negidi
HR-Hyderabad
M: [Phone Number Removed For Privacy Reasons].
From India, Hyderabad
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Ashok's structure looks good. Conveyance allowance of 800 is tax-free. Anything above is taxable, so we need to stay there. Traveling allowance makes no sense unless he is not being paid traveling money for going anywhere. Higher HRA helps where he is paying rent and can get tax benefits for it. PF max limit is 780, but you can pay more if you wish. Most don't. Also, anyone joining at above 6500 and not having an existing PF account can opt out of PF. A simple structure as given by Ashok is a good idea. There is no need to make it more complex.
From India, Mumbai
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From India, Mumbai
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Dear Anjali, if the salary is more than 15,000/-, in this case, that person has already crossed the ESIC limit. Your consultant has provided you with the wrong salary structures. When preparing the salary structures, all the allowances are calculated as a percentage. For example, Basic X 20% = HRA.
Regards,
Nikhil
From India, Pune
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Regards,
Nikhil
From India, Pune
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To set up your company's salary structure, you should first seek approval from your management regarding the ratio of Basic: Gross salary or CTC. In normal cases, it is usually 40/50/60:100.
Once you have decided on this ratio, please note that it is one of the most influential financial components in your policy. PF/Gratuity/Bonus/Leave encashment all depend on this ratio.
As a good practice to ensure fair/living wages, you can set this ratio at 50:100 to the CTC, i.e., 50% of Basic of the CTC, not Gross. For this purpose, you need to finalize your salary structure in CTC and not based on the Gross monthly salary.
Other Ratios
- HRA: It is a minimum of 5%, but as a good practice, you can divide it into three categories:
- Senior Staff: 40% of Basic Salary (as it is not taxable)
- Middle Staff: 30%
- Junior Staff/Worker: 25% of Basic salary
- Conveyance allowance may be 5%
- Education allowance: 2%
It is advised to remove the Special Allowance from the structure as it may lead to disputes in the future. You can consider it as (Basic + D.A.).
Please note that Conveyance allowance of Rs. 800/- per month is exempted and Education allowance of Rs. 200/- per month (for two children) is also exempted from Tax.
If your consultant provides you with a portion of Basic that is too low, please do not accept that.
Other Annual Earning Components
- Ex-gratia/Bonus: 8.33% of Basic or Gross
- Medical Allowance: depends on grade but should be below Rs. 15,000 per annum
- LTA: depends on grade but should be below Rs. 15,000 per annum
- PF share
- ESIC share
- PTax
This information may be useful for you.
Regards,
Mangesh Wakodkar
Aurangabad
From India, Pune
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Once you have decided on this ratio, please note that it is one of the most influential financial components in your policy. PF/Gratuity/Bonus/Leave encashment all depend on this ratio.
As a good practice to ensure fair/living wages, you can set this ratio at 50:100 to the CTC, i.e., 50% of Basic of the CTC, not Gross. For this purpose, you need to finalize your salary structure in CTC and not based on the Gross monthly salary.
Other Ratios
- HRA: It is a minimum of 5%, but as a good practice, you can divide it into three categories:
- Senior Staff: 40% of Basic Salary (as it is not taxable)
- Middle Staff: 30%
- Junior Staff/Worker: 25% of Basic salary
- Conveyance allowance may be 5%
- Education allowance: 2%
It is advised to remove the Special Allowance from the structure as it may lead to disputes in the future. You can consider it as (Basic + D.A.).
Please note that Conveyance allowance of Rs. 800/- per month is exempted and Education allowance of Rs. 200/- per month (for two children) is also exempted from Tax.
If your consultant provides you with a portion of Basic that is too low, please do not accept that.
Other Annual Earning Components
- Ex-gratia/Bonus: 8.33% of Basic or Gross
- Medical Allowance: depends on grade but should be below Rs. 15,000 per annum
- LTA: depends on grade but should be below Rs. 15,000 per annum
- PF share
- ESIC share
- PTax
This information may be useful for you.
Regards,
Mangesh Wakodkar
Aurangabad
From India, Pune
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Basic - 60% of CTC
HRA - 40% of basic
Conveyance - 800 tax exempt
Medical allowances - 1250 tax exempt, reimbursement
Other allowances - rest of CTC
Deduction part:
PF - 12% of basic from the employee's side
Mess - As per the calculation
The rest would be the net pay or take-home pay.
From India, Mumbai
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HRA - 40% of basic
Conveyance - 800 tax exempt
Medical allowances - 1250 tax exempt, reimbursement
Other allowances - rest of CTC
Deduction part:
PF - 12% of basic from the employee's side
Mess - As per the calculation
The rest would be the net pay or take-home pay.
From India, Mumbai
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u r saying gross salary 25000/- but ESIC applicable only gross salary 15000/-, above 15000/- gross salary ESIC not applicable
From India, Vijayawada
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From India, Vijayawada
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It's not Special Allowances-1004.40; it should be Dearness Allowance-1004.40. ESIC is not required in this case because the gross salary is more than 15,000.00. Therefore, you should not deduct (1.75%) from the gross and also should not make a payment (4.75%).
Net Monthly Payment: 23,542 + ESIC (@1.75%) Insurance 437 = 23,979
CTC: 27,119.18 - 1,187.48 = 25,931.70
Everything else is correct.
Regards
From India, Hyderabad
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Net Monthly Payment: 23,542 + ESIC (@1.75%) Insurance 437 = 23,979
CTC: 27,119.18 - 1,187.48 = 25,931.70
Everything else is correct.
Regards
From India, Hyderabad
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Anjali, As per act employee eligible for ESI when his salary is less than 15000/- and how come you are showing in your salary structure. and house rent allowance also i may feel wrong. regards vani
From India, Hyderabad
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From India, Hyderabad
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It's really confusing data provided by the consultant. You can also prepare a salary structure in the following way:
Gross Salary Structure
Gross Salary = 25,000
Basic Salary = 15,000 (60% of Gross Salary)
HRA = 7,500 (50% of Basic)
Conveyance = 2,500 (Rest Amount)
Total = 25,000 per month
Deductions
PF = 1,800 (12% of Basic)
LWF = ? (According to law)
PT = ? (If applicable in the state accordingly)
ESI = Not applicable in this case (Gross Salary is more than 15,000)
Total Deduction = 2,200 (In the above case)
Regards,
Neeraj Sharma
From India, Delhi
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Gross Salary Structure
Gross Salary = 25,000
Basic Salary = 15,000 (60% of Gross Salary)
HRA = 7,500 (50% of Basic)
Conveyance = 2,500 (Rest Amount)
Total = 25,000 per month
Deductions
PF = 1,800 (12% of Basic)
LWF = ? (According to law)
PT = ? (If applicable in the state accordingly)
ESI = Not applicable in this case (Gross Salary is more than 15,000)
Total Deduction = 2,200 (In the above case)
Regards,
Neeraj Sharma
From India, Delhi
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what are the rulls that who will get allowances or not like HRA, PF ESI ETC. Is it depend on basic wages or something else
From India, Delhi
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From India, Delhi
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I will try my best to make it easy for you. Do not get confused.
1. Keep the basic salary above the minimum wages applicable to your locality. The balance part of the salary may be bifurcated into other allowances.
2. PF is to be deducted from the basic salary at 12% from the employee.
3. ESIC is applicable only if the gross salary is 15,000 or less.
4. LWF is applicable only to employees below the supervisory level.
5. Some companies add gratuity to the CTC. It is to be calculated on the basic at 4.8% (basic salary/26*15*number of years of service). The eligibility for gratuity is that the employee has to complete 5 years of continuous service.
For any further clarification, you may reply.
Regards
From India, Chicalim
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1. Keep the basic salary above the minimum wages applicable to your locality. The balance part of the salary may be bifurcated into other allowances.
2. PF is to be deducted from the basic salary at 12% from the employee.
3. ESIC is applicable only if the gross salary is 15,000 or less.
4. LWF is applicable only to employees below the supervisory level.
5. Some companies add gratuity to the CTC. It is to be calculated on the basic at 4.8% (basic salary/26*15*number of years of service). The eligibility for gratuity is that the employee has to complete 5 years of continuous service.
For any further clarification, you may reply.
Regards
From India, Chicalim
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Employee Benefits.doc