Major Salary Components
Money received under an Employer-Employee relationship is called salary. If one is a freelancer or hired by an organization on a contract basis, their income would not be treated as salary income. In such cases, your income would be treated as income from business and profession.
The salary consists of the following parts:
Basic Salary
As the name suggests, this forms the very basis of salary. This is the core of salary, and many other components may be calculated based on this amount. It usually depends on one's grade within the company's salary structure. It is a fixed part of one's compensation structure, and the complete amount becomes a part of your in-hand salary.
Allowances
Apart from the basic salary, there are some allowances your CTC will contain. Examples include HRA, conveyance allowance, and leave travel allowance. Some of these allowances are tax-free up to a certain limit, and some of them depend on your actual spending. It is the amount received by an individual paid by his/her employer in addition to the basic salary to meet some service requirements such as Dearness Allowance (DA), House Rent Allowance (HRA), Leave Travel Assistance (LTA), Lunch Allowance, Conveyance Allowance, Children's Education Allowance, City Compensatory Allowance, etc. Allowances can be fully taxable, partly taxable, or non-taxable.
Claims or Perquisites
A part of your salary may also be made up of your billed claims. These include components like mobile allowance, medical allowance, etc. There is a maximum limit set to these components, and they are paid when you submit your bills. These are usually tax-free. It is any benefit or amenity granted or provided free of cost or at a concessional rate, such as a rent-free unfurnished house, rent-free furnished house, motor car facility, reimbursement of gas, electricity & water, club facility, domestic servant facility, interest subsidy on loan, reimbursement of medical bills, reimbursement of hospital bills, reimbursement of telephone bills, benefits derived by employee stock options, and so on.
How Are Perquisites Taxed?
Since these are non-cash components, they cannot be taxed directly. So, the income tax laws attach a certain value to each of these components and charge a tax on them. The calculation of this value varies from category to category. Nevertheless, the thumb rule across all categories is that only those benefits that you use for personal purposes will be considered as perquisites.
Deductions
A major part of your CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary. Compulsory deductions include Provident Fund, Income Tax, and Professional Tax (where applicable). Optional deductions include recovery for advance or loan if taken, voluntary contribution to P.F., etc.
Provident Fund Contribution
Provident fund contribution has two sides: the employer's contribution and the employee's contribution. This is usually 12 percent of the basic salary. However, this contribution is not paid out. It is directly deposited in the Provident Fund (PF) account and paid to the employee when he retires or resigns. There is also an employee's contribution to PF. This amount is deducted from his monthly salary and deposited in his PF account. For details on provident fund, you can read about Provident Fund (PF) and Voluntary Provident Fund (VPF).
Performance-Linked Pay
Linking a part of the salary to productivity and performance has become a trend today. You get the complete amount only on 100% achievement of the target, but it forms a part of your CTC, fattening it up.
Different Types of Salary
- **Gross Salary:** This is the amount of salary paid after adding all benefits and allowances and before deducting any tax.
- **Net Salary:** This is what is left of your salary after deductions have been made.
- **Take Home Salary:** This is usually the Net Salary unless there are some personal deductions like loan or bond repayments.
- **Cost to Company:** Companies use the term "Cost to Company" to calculate the total cost to employ, i.e., all the costs associated with an employment contract. A major part of CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as a part of in-hand salary. As such, although it increases your CTC, it does not increment your net salary.
Taxes
Taxes are an unavoidable evil, and they eat up a large chunk of your salary. Taxes are obviously never mentioned in your offer letter. So, ensure that you calculate your tax liabilities with the new income in accordance with tax policies to figure out the amount you will receive in your paycheck.
The salary structure varies from company to company based on their policies. Some of the common pay heads used are:
1) **Basic:** 35% – 50% of Gross
2) **HRA:** 40% of Basic for Non-metro & 50% of Basic for Metro (Delhi, Mumbai, Chennai, or Kolkata)
3) **Conveyance:** Max Rs. 800/PM, which is a Max of Rs. 9600 PA
4) **Medical Reimbursement:** Max Rs. 1250/PM, which can be a max of Rs. 15000 PA
5) **Special Allowance:** Balance of Gross will be provided as Special Allowance
Statutory Contributions
1) **PF**
- **Employee Contribution:** 12% on Basic (can be subjective to 780, which is 12% of the minimum basic salary, i.e., 6500)
- **Employer's Contribution:** EPS – 8.33% (subject to a ceiling of Rs. 541)
- **PF:** Rest of the amount out of 12% (can be subjective to 780, which is 12% of the minimum basic salary, i.e., 6500)
- **PF Administration Charges:** 1.1%
- **EDLI:** 0.5% (subject to a ceiling salary of Rs. 6500)
- **EDLI Administration Charges:** 0.01%
2) **ESI:** Applicable to employees whose Gross Salary is less than or equal to Rs.15000
- **Employee Contribution:** 1.75% on Gross
- **Employer's Contribution:** 4.75% on Gross
3) **Professional Tax:** It varies from state to state
Net Salary = Gross – PF (Employee Contribution) – ESI (Employee Contribution) – Professional Tax
CTC = Gross + PF (Employer's Contribution) – ESI (Employer's Contribution)
Gratuity = Basic/26*15*(number of years - It is payable to the employee who completes 5 years of service in the organization. It can be shown as a part of CTC.)
OT Calculation = Basic + DA/26/8*number of hours * 2
If employees come under high salary, then you can again split up the amount in Special Allowance as:
1) Food coupons
2) Car Hire
3) Petrol and Maintenance for Car
4) LTA
FBT is applicable apart from LTA.
The Variable Pay % also differs from company to company based on the policy.
PaySlip
A paycheck is a document/record issued by an employer to an employee, which shows how much money an employee has earned and how much tax or insurance, etc., has been deducted. It will typically detail the gross income and all taxes and any other deductions such as retirement plan or pension contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay.
Form 16
If you are a salaried employee in an organization, then you get the salary after deducting tax by the employer. This process is called Tax Deduction at Source (TDS). The company must issue a Form 16, which contains the details about the salary earned by that employee and how much tax was deducted. The tax deducted is paid to the government by the company. Form 16 is proof of the employee's income and tax paid to the government. It is issued under section 203 of the Income Tax Act for Tax. The taxpayer has to use Form 16 to file the Income Tax return every financial year.
From India, Mumbai
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148Money received under an Employer-Employee relationship is called salary. If one is a freelancer or hired by an organization on a contract basis, their income would not be treated as salary income. In such cases, your income would be treated as income from business and profession.
The salary consists of the following parts:
Basic Salary
As the name suggests, this forms the very basis of salary. This is the core of salary, and many other components may be calculated based on this amount. It usually depends on one's grade within the company's salary structure. It is a fixed part of one's compensation structure, and the complete amount becomes a part of your in-hand salary.
Allowances
Apart from the basic salary, there are some allowances your CTC will contain. Examples include HRA, conveyance allowance, and leave travel allowance. Some of these allowances are tax-free up to a certain limit, and some of them depend on your actual spending. It is the amount received by an individual paid by his/her employer in addition to the basic salary to meet some service requirements such as Dearness Allowance (DA), House Rent Allowance (HRA), Leave Travel Assistance (LTA), Lunch Allowance, Conveyance Allowance, Children's Education Allowance, City Compensatory Allowance, etc. Allowances can be fully taxable, partly taxable, or non-taxable.
Claims or Perquisites
A part of your salary may also be made up of your billed claims. These include components like mobile allowance, medical allowance, etc. There is a maximum limit set to these components, and they are paid when you submit your bills. These are usually tax-free. It is any benefit or amenity granted or provided free of cost or at a concessional rate, such as a rent-free unfurnished house, rent-free furnished house, motor car facility, reimbursement of gas, electricity & water, club facility, domestic servant facility, interest subsidy on loan, reimbursement of medical bills, reimbursement of hospital bills, reimbursement of telephone bills, benefits derived by employee stock options, and so on.
How Are Perquisites Taxed?
Since these are non-cash components, they cannot be taxed directly. So, the income tax laws attach a certain value to each of these components and charge a tax on them. The calculation of this value varies from category to category. Nevertheless, the thumb rule across all categories is that only those benefits that you use for personal purposes will be considered as perquisites.
Deductions
A major part of your CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary. Compulsory deductions include Provident Fund, Income Tax, and Professional Tax (where applicable). Optional deductions include recovery for advance or loan if taken, voluntary contribution to P.F., etc.
Provident Fund Contribution
Provident fund contribution has two sides: the employer's contribution and the employee's contribution. This is usually 12 percent of the basic salary. However, this contribution is not paid out. It is directly deposited in the Provident Fund (PF) account and paid to the employee when he retires or resigns. There is also an employee's contribution to PF. This amount is deducted from his monthly salary and deposited in his PF account. For details on provident fund, you can read about Provident Fund (PF) and Voluntary Provident Fund (VPF).
Performance-Linked Pay
Linking a part of the salary to productivity and performance has become a trend today. You get the complete amount only on 100% achievement of the target, but it forms a part of your CTC, fattening it up.
Different Types of Salary
- **Gross Salary:** This is the amount of salary paid after adding all benefits and allowances and before deducting any tax.
- **Net Salary:** This is what is left of your salary after deductions have been made.
- **Take Home Salary:** This is usually the Net Salary unless there are some personal deductions like loan or bond repayments.
- **Cost to Company:** Companies use the term "Cost to Company" to calculate the total cost to employ, i.e., all the costs associated with an employment contract. A major part of CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as a part of in-hand salary. As such, although it increases your CTC, it does not increment your net salary.
Taxes
Taxes are an unavoidable evil, and they eat up a large chunk of your salary. Taxes are obviously never mentioned in your offer letter. So, ensure that you calculate your tax liabilities with the new income in accordance with tax policies to figure out the amount you will receive in your paycheck.
The salary structure varies from company to company based on their policies. Some of the common pay heads used are:
1) **Basic:** 35% – 50% of Gross
2) **HRA:** 40% of Basic for Non-metro & 50% of Basic for Metro (Delhi, Mumbai, Chennai, or Kolkata)
3) **Conveyance:** Max Rs. 800/PM, which is a Max of Rs. 9600 PA
4) **Medical Reimbursement:** Max Rs. 1250/PM, which can be a max of Rs. 15000 PA
5) **Special Allowance:** Balance of Gross will be provided as Special Allowance
Statutory Contributions
1) **PF**
- **Employee Contribution:** 12% on Basic (can be subjective to 780, which is 12% of the minimum basic salary, i.e., 6500)
- **Employer's Contribution:** EPS – 8.33% (subject to a ceiling of Rs. 541)
- **PF:** Rest of the amount out of 12% (can be subjective to 780, which is 12% of the minimum basic salary, i.e., 6500)
- **PF Administration Charges:** 1.1%
- **EDLI:** 0.5% (subject to a ceiling salary of Rs. 6500)
- **EDLI Administration Charges:** 0.01%
2) **ESI:** Applicable to employees whose Gross Salary is less than or equal to Rs.15000
- **Employee Contribution:** 1.75% on Gross
- **Employer's Contribution:** 4.75% on Gross
3) **Professional Tax:** It varies from state to state
Net Salary = Gross – PF (Employee Contribution) – ESI (Employee Contribution) – Professional Tax
CTC = Gross + PF (Employer's Contribution) – ESI (Employer's Contribution)
Gratuity = Basic/26*15*(number of years - It is payable to the employee who completes 5 years of service in the organization. It can be shown as a part of CTC.)
OT Calculation = Basic + DA/26/8*number of hours * 2
If employees come under high salary, then you can again split up the amount in Special Allowance as:
1) Food coupons
2) Car Hire
3) Petrol and Maintenance for Car
4) LTA
FBT is applicable apart from LTA.
The Variable Pay % also differs from company to company based on the policy.
PaySlip
A paycheck is a document/record issued by an employer to an employee, which shows how much money an employee has earned and how much tax or insurance, etc., has been deducted. It will typically detail the gross income and all taxes and any other deductions such as retirement plan or pension contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay.
Form 16
If you are a salaried employee in an organization, then you get the salary after deducting tax by the employer. This process is called Tax Deduction at Source (TDS). The company must issue a Form 16, which contains the details about the salary earned by that employee and how much tax was deducted. The tax deducted is paid to the government by the company. Form 16 is proof of the employee's income and tax paid to the government. It is issued under section 203 of the Income Tax Act for Tax. The taxpayer has to use Form 16 to file the Income Tax return every financial year.
From India, Mumbai
Acknowledge(2)Amend(0)
Major Salary Components
Money received under an employer-employee relationship is called a salary. If one is a freelancer or hired by an organization on a contract basis, their income would not be treated as salary income. In such cases, your income would be treated as income from business and profession.
The salary consists of the following parts:
Basic Salary
As the name suggests, this forms the very basis of salary. This is the core of salary, and many other components may be calculated based on this amount. It usually depends on one's grade within the company's salary structure. It is a fixed part of one's compensation structure, and the complete amount becomes a part of your in-hand salary.
Allowances
Apart from the basic salary, there are some allowances your CTC will contain. Examples include HRA, conveyance allowance, and leave travel allowance. Some of these allowances are tax-free up to a certain limit, and some of them are dependent on your actual spending. It is the amount received by an individual paid by his/her employer in addition to the basic salary to meet some service requirements such as Dearness Allowance (DA), House Rent Allowance (HRA), Leave Travel Assistance (LTA), Lunch Allowance, Conveyance Allowance, Children's Education Allowance, City Compensatory Allowance, etc. Allowances can be fully taxable, partly taxable, or non-taxable.
Claims or Perquisites
A part of your salary may also be made up of your billed claims. These include components like mobile allowance, medical allowance, etc. There is a maximum limit set to these components, and they are paid when you submit your bills. These are usually tax-free. It is any benefit or amenity granted or provided free of cost or at a concessional rate, such as a rent-free unfurnished house, rent-free furnished house, motor car facility, reimbursement of gas, electricity & water, club facility, domestic servant facility, interest subsidy on loan, reimbursement of medical bills, reimbursement of hospital bills, reimbursement of telephone bills, benefits derived by employee stock options, and so on.
How Are Perquisites Taxed?
Since these are non-cash components, they cannot be taxed directly. So, the income tax laws attach a certain value to each of these components and charge a tax on them. The calculation of this value varies from category to category. Nevertheless, the thumb rule across all categories is that only those benefits that you use for personal purposes will be considered as perquisites.
Deductions
A major part of your CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary. Compulsory deductions include Provident Fund, Income Tax, and Professional Tax (where applicable). Optional deductions include recovery for advance or loan if taken, and voluntary contribution to P.F., etc.
Provident Fund Contribution
Provident fund contribution has two sides: the employer's contribution and the employee's contribution. This is usually 12 percent of the basic salary. However, this contribution is not paid out. It is directly deposited in the Provident Fund (PF) account and paid to the employee when they retire or resign. There is also the employee's contribution to PF. This amount is deducted from their monthly salary and deposited in their PF account. For details on the provident fund, you can read Provident Fund (PF) and Voluntary Provident Fund (VPF).
Performance-Linked Pay
Linking a part of the salary to productivity and performance has become a trend today. You get the complete amount only on 100% achievement of the target, but it forms a part of your CTC, fattening it up.
Different Types of Salary
- Gross Salary: This is the amount of salary paid after adding all benefits and allowances and before deducting any tax.
- Net Salary: This is what is left of your salary after deductions have been made.
- Take Home Salary: This is usually the Net Salary unless there are some personal deductions like loan or bond repayments.
- Cost to Company: Companies use the term "Cost to Company" to calculate the total cost to employ, i.e., all the costs associated with an employment contract. A major part of CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary.
Taxes
Taxes are an unavoidable evil, and they eat up a large chunk of your salary. Taxes are obviously never mentioned in your offer letter. So, ensure that you calculate your tax liabilities with the new income in accordance with tax policies to figure out the amount you will receive in your paycheck.
The salary structure varies from company to company based on their policies. Some of the common pay heads used are:
1) Basic – 35% – 50% of Gross
2) HRA – 40% of Basic for Non-metro & 50% of Basic for Metro (Delhi, Mumbai, Chennai, or Kolkata)
3) Con – Max Rs. 800/PM, which is Max of Rs. 9600 PA
4) Medical Reim – Max Rs. 1250/PM, which can be max of Rs. 15000 PA
5) Spl Allow – Balance of Gross will be provided as Spl Allow
Statutory
1) PF
- Emp Contribution – 12% on Basic (can be subjective to 780, which is 12% of the min basic salary i.e., 6500)
- Emp'r Contribution - (EPS – 8.33% (subject to a ceiling of Rs. 541)
- PF – Rest of the amount out of 12% (can be subjective to 780, which is 12% of the min basic salary i.e., 6500)
- PF administration charges – 1.1%
- EDLI – 0.5% (subject to a ceiling salary of Rs. 6500)
- EDLI administration charges 0.01%
2) ESI – Applicable to employees whose Gross Salary is less than or equal to Rs. 15000
- Emp Contribution – 1.75% on Gross
- Emp'r Contribution – 4.75% on Gross
PT – It varies state to state
Net Salary = Gross – PF (Emp Cont) – ESI (Emp Cont) – PT
CTC = Gross + PF (Emp'r Cont) – ESI (Emp'r Cont)
Gratuity = Basic/26*15*(no. of years - It is payable to the employee who completes 5 years of service in the organization. It can be shown as a part of CTC.)
OT Calculation = basic+da/26/8*no.of hrs * 2
If employees come under high salary, then you can again split up the amount in Spl Allow as:
1) Food coupons
2) Car Hire
3) Petrol and Maint for Car
4) LTA
FBT is applicable apart from LTA.
The Variable Pay % also differs from company to company based on the policy.
PaySlip
A paycheck is a document/record issued by an employer to an employee which shows how much money an employee has earned and how much tax or insurance, etc., has been deducted. It will typically detail the gross income and all taxes and any other deductions such as retirement plan or pension contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay.
Form 16
If you are a salaried employee in an organization, then you get the salary after deducting tax by the employer. This process is called Tax Deduction at Source (TDS). The company must issue a Form 16 which contains the details about the salary earned by that employee and how much tax was deducted. The tax deducted is paid to the government by the company. Form 16 is the proof of the employee's income and tax paid to the government. It is issued under section 203 of the Income Tax Act for tax. The taxpayer has to use Form 16 to file the Income Tax return every financial year.
From India, Mumbai
Acknowledge(3)
Amend(0)
Money received under an employer-employee relationship is called a salary. If one is a freelancer or hired by an organization on a contract basis, their income would not be treated as salary income. In such cases, your income would be treated as income from business and profession.
The salary consists of the following parts:
Basic Salary
As the name suggests, this forms the very basis of salary. This is the core of salary, and many other components may be calculated based on this amount. It usually depends on one's grade within the company's salary structure. It is a fixed part of one's compensation structure, and the complete amount becomes a part of your in-hand salary.
Allowances
Apart from the basic salary, there are some allowances your CTC will contain. Examples include HRA, conveyance allowance, and leave travel allowance. Some of these allowances are tax-free up to a certain limit, and some of them are dependent on your actual spending. It is the amount received by an individual paid by his/her employer in addition to the basic salary to meet some service requirements such as Dearness Allowance (DA), House Rent Allowance (HRA), Leave Travel Assistance (LTA), Lunch Allowance, Conveyance Allowance, Children's Education Allowance, City Compensatory Allowance, etc. Allowances can be fully taxable, partly taxable, or non-taxable.
Claims or Perquisites
A part of your salary may also be made up of your billed claims. These include components like mobile allowance, medical allowance, etc. There is a maximum limit set to these components, and they are paid when you submit your bills. These are usually tax-free. It is any benefit or amenity granted or provided free of cost or at a concessional rate, such as a rent-free unfurnished house, rent-free furnished house, motor car facility, reimbursement of gas, electricity & water, club facility, domestic servant facility, interest subsidy on loan, reimbursement of medical bills, reimbursement of hospital bills, reimbursement of telephone bills, benefits derived by employee stock options, and so on.
How Are Perquisites Taxed?
Since these are non-cash components, they cannot be taxed directly. So, the income tax laws attach a certain value to each of these components and charge a tax on them. The calculation of this value varies from category to category. Nevertheless, the thumb rule across all categories is that only those benefits that you use for personal purposes will be considered as perquisites.
Deductions
A major part of your CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary. Compulsory deductions include Provident Fund, Income Tax, and Professional Tax (where applicable). Optional deductions include recovery for advance or loan if taken, and voluntary contribution to P.F., etc.
Provident Fund Contribution
Provident fund contribution has two sides: the employer's contribution and the employee's contribution. This is usually 12 percent of the basic salary. However, this contribution is not paid out. It is directly deposited in the Provident Fund (PF) account and paid to the employee when they retire or resign. There is also the employee's contribution to PF. This amount is deducted from their monthly salary and deposited in their PF account. For details on the provident fund, you can read Provident Fund (PF) and Voluntary Provident Fund (VPF).
Performance-Linked Pay
Linking a part of the salary to productivity and performance has become a trend today. You get the complete amount only on 100% achievement of the target, but it forms a part of your CTC, fattening it up.
Different Types of Salary
- Gross Salary: This is the amount of salary paid after adding all benefits and allowances and before deducting any tax.
- Net Salary: This is what is left of your salary after deductions have been made.
- Take Home Salary: This is usually the Net Salary unless there are some personal deductions like loan or bond repayments.
- Cost to Company: Companies use the term "Cost to Company" to calculate the total cost to employ, i.e., all the costs associated with an employment contract. A major part of CTC comprises compulsory deductibles. These include deductions for provident fund, medical insurance, etc. They form a part of your compensation structure, but you do not get them as part of your in-hand salary. As such, although it increases your CTC, it does not increment your net salary.
Taxes
Taxes are an unavoidable evil, and they eat up a large chunk of your salary. Taxes are obviously never mentioned in your offer letter. So, ensure that you calculate your tax liabilities with the new income in accordance with tax policies to figure out the amount you will receive in your paycheck.
The salary structure varies from company to company based on their policies. Some of the common pay heads used are:
1) Basic – 35% – 50% of Gross
2) HRA – 40% of Basic for Non-metro & 50% of Basic for Metro (Delhi, Mumbai, Chennai, or Kolkata)
3) Con – Max Rs. 800/PM, which is Max of Rs. 9600 PA
4) Medical Reim – Max Rs. 1250/PM, which can be max of Rs. 15000 PA
5) Spl Allow – Balance of Gross will be provided as Spl Allow
Statutory
1) PF
- Emp Contribution – 12% on Basic (can be subjective to 780, which is 12% of the min basic salary i.e., 6500)
- Emp'r Contribution - (EPS – 8.33% (subject to a ceiling of Rs. 541)
- PF – Rest of the amount out of 12% (can be subjective to 780, which is 12% of the min basic salary i.e., 6500)
- PF administration charges – 1.1%
- EDLI – 0.5% (subject to a ceiling salary of Rs. 6500)
- EDLI administration charges 0.01%
2) ESI – Applicable to employees whose Gross Salary is less than or equal to Rs. 15000
- Emp Contribution – 1.75% on Gross
- Emp'r Contribution – 4.75% on Gross
PT – It varies state to state
Net Salary = Gross – PF (Emp Cont) – ESI (Emp Cont) – PT
CTC = Gross + PF (Emp'r Cont) – ESI (Emp'r Cont)
Gratuity = Basic/26*15*(no. of years - It is payable to the employee who completes 5 years of service in the organization. It can be shown as a part of CTC.)
OT Calculation = basic+da/26/8*no.of hrs * 2
If employees come under high salary, then you can again split up the amount in Spl Allow as:
1) Food coupons
2) Car Hire
3) Petrol and Maint for Car
4) LTA
FBT is applicable apart from LTA.
The Variable Pay % also differs from company to company based on the policy.
PaySlip
A paycheck is a document/record issued by an employer to an employee which shows how much money an employee has earned and how much tax or insurance, etc., has been deducted. It will typically detail the gross income and all taxes and any other deductions such as retirement plan or pension contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay.
Form 16
If you are a salaried employee in an organization, then you get the salary after deducting tax by the employer. This process is called Tax Deduction at Source (TDS). The company must issue a Form 16 which contains the details about the salary earned by that employee and how much tax was deducted. The tax deducted is paid to the government by the company. Form 16 is the proof of the employee's income and tax paid to the government. It is issued under section 203 of the Income Tax Act for tax. The taxpayer has to use Form 16 to file the Income Tax return every financial year.
From India, Mumbai
Acknowledge(3)Amend(0)
Change in Provident Fund Deduction Structure
From 30th November, the structure of deductions for the Employee Provident Fund (EPF) has been changed. This change was initiated by the circular issued on the last day of the retirement of Mr. R. C. Mishra, the chairman of the Employee Provident Fund Organization (EPFO). Now, all allowances will be covered under the salary rather than just the basic salary, excluding the House Rent Allowance (HRA).
Regards
From India, New Delhi
Acknowledge(0)Amend(0)
From 30th November, the structure of deductions for the Employee Provident Fund (EPF) has been changed. This change was initiated by the circular issued on the last day of the retirement of Mr. R. C. Mishra, the chairman of the Employee Provident Fund Organization (EPFO). Now, all allowances will be covered under the salary rather than just the basic salary, excluding the House Rent Allowance (HRA).
Regards
From India, New Delhi
Acknowledge(0)Amend(0)
Thanks for giving detailed information about the salary and how it is divided. Even some of the points were not clear in my mind, but after reading this article, there are no questions left.
I just want to know about the PF amount. After leaving the company, when do we get the remaining amount in our bank account? How much time does the process take?
From India, Mumbai
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I just want to know about the PF amount. After leaving the company, when do we get the remaining amount in our bank account? How much time does the process take?
From India, Mumbai
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Creating a Competitive Salary Structure.doc
Compensation Structure.ppt