Hello Professionals,
I recently got appointed as an HR professional in an IT company. In my company, there were no standards or policies followed previously by the HR department. We started providing payslips from February 2013.
Salary Calculation Method
My actual problem is that when generating employee salaries, we calculate based on hours worked but provide the payslip based on days. I am confused about whether this is the correct way.
The calculation breakdown is as follows:
- Basic is calculated as 50% of the actual salary.
- HRA is 40% of the basic salary.
- Medical expenses are 40% of the HRA.
- Conveyance is also 40% of the HRA.
- Special allowance is 70% of the HRA.
They provide medical expenses every month and deduct professional tax based on total earnings.
Working Hours Calculation
Regarding working hours calculation, only working days and hours per day are considered. For example, if there are 23 working days and 9 hours per day, the total hours for that month would be 207. If someone is 2 hours late, the calculation would be 207-2=205.
I encountered an issue where an employee's salary is Rs. 22,000 per month, but they worked only 22 days instead of 23. The calculation should be Rs. 22,000/207 = Rs. 106.28 per hour, totaling Rs. 21,043.48. However, my Managing Director credited Rs. 21,500 into their account.
Payslip Adjustment Query
How should I show the net pay as Rs. 21,500 in the payslip? Will the basic salary be affected or any other component?
Your responses will be greatly appreciated.
From India, Hyderabad
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7I recently got appointed as an HR professional in an IT company. In my company, there were no standards or policies followed previously by the HR department. We started providing payslips from February 2013.
Salary Calculation Method
My actual problem is that when generating employee salaries, we calculate based on hours worked but provide the payslip based on days. I am confused about whether this is the correct way.
The calculation breakdown is as follows:
- Basic is calculated as 50% of the actual salary.
- HRA is 40% of the basic salary.
- Medical expenses are 40% of the HRA.
- Conveyance is also 40% of the HRA.
- Special allowance is 70% of the HRA.
They provide medical expenses every month and deduct professional tax based on total earnings.
Working Hours Calculation
Regarding working hours calculation, only working days and hours per day are considered. For example, if there are 23 working days and 9 hours per day, the total hours for that month would be 207. If someone is 2 hours late, the calculation would be 207-2=205.
I encountered an issue where an employee's salary is Rs. 22,000 per month, but they worked only 22 days instead of 23. The calculation should be Rs. 22,000/207 = Rs. 106.28 per hour, totaling Rs. 21,043.48. However, my Managing Director credited Rs. 21,500 into their account.
Payslip Adjustment Query
How should I show the net pay as Rs. 21,500 in the payslip? Will the basic salary be affected or any other component?
Your responses will be greatly appreciated.
From India, Hyderabad
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Though the concept of calculating salary in your organization is quite unique, from your above-mentioned information, it seems you have paid the wrong salary to the employee. Why do you wish to change the salary slip of the employee when you have paid an incorrect amount to him? This doesn't seem clear. On the salary slip, you should mention the correct amount payable to him as per the working days due to him so as to communicate to the employee that he has been paid an excess amount by mistake, which he may either give back immediately or you may recover the same in the next payroll cycle.
Changing the salary slip is not an ideal way.
Warm regards,
Umesh Chaudhary
[Email Removed For Privacy Reasons]
From India, Delhi
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Changing the salary slip is not an ideal way.
Warm regards,
Umesh Chaudhary
[Email Removed For Privacy Reasons]
From India, Delhi
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First of all, thank you for your response. What you said is correct; we paid the wrong amount. My MD said the same. I am asking how should I show them on the payslip. According to their working hours, it must be 21,043. However, I have to show it as 21,500 as net pay. After deductions, it is 200. Another doubt is if the basic pay and allowances will be affected if I pay them 21,500 instead of 22,000.
Thank you.
From India, Hyderabad
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Thank you.
From India, Hyderabad
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Hi Feeba,
In simple words, the employee is eligible for a payment of Rs. 21,043 but is being paid Rs. 21,500. The question is about showing Rs. 457 in the payslip, right? Is it not possible to show Rs. 457 as other earnings, incentives, or arrears?
Regards,
[Username]
From India, Pune
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In simple words, the employee is eligible for a payment of Rs. 21,043 but is being paid Rs. 21,500. The question is about showing Rs. 457 in the payslip, right? Is it not possible to show Rs. 457 as other earnings, incentives, or arrears?
Regards,
[Username]
From India, Pune
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