How can I calculate the salary ? Let’s say the package is 3.5 lac per annum. What is the percentage of PF, Allowance etc???? Sumedha Grover
From India, Gurgaon
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From India, Gurgaon
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Hello,
Is the figure one called CTC?
Is there no break up provided along the following heads of earnings?
1) Basic
2) Dearness Allowance
3) Other allowances
4) Indirect expenses
5) Incidentals, etc.
This kind of a break-up would be provided in case of CTC and even otherwise. Does the employer have a standard grade-wise emolument structure?
It is also possible that a new joiner is given the freedom to create his break-up to suit Income Tax incidence.
What category is applicable to our case?
Regardless of the above, kindly note that PF is applicable (as of this date) on a (Basic + D.A.) up to Rs. 6500/- per month. If we assign this factor to be above this figure, then you have two choices really. Either restrict PF contributions to this figure OR simply keep the person out of PF coverage even if the act is applicable to the establishment and a few employees are covered under it anyway! Then ESI is applicable in "notified areas" (by ESIC) to employees drawing a total salary/wage of Rs. 10,000/- per month.
A similar approach may be taken for other acts depending on their provisions.
If I can help further, kindly do not hesitate!
Regards,
Samvedan
October 12, 2007
From India, Pune
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321Is the figure one called CTC?
Is there no break up provided along the following heads of earnings?
1) Basic
2) Dearness Allowance
3) Other allowances
4) Indirect expenses
5) Incidentals, etc.
This kind of a break-up would be provided in case of CTC and even otherwise. Does the employer have a standard grade-wise emolument structure?
It is also possible that a new joiner is given the freedom to create his break-up to suit Income Tax incidence.
What category is applicable to our case?
Regardless of the above, kindly note that PF is applicable (as of this date) on a (Basic + D.A.) up to Rs. 6500/- per month. If we assign this factor to be above this figure, then you have two choices really. Either restrict PF contributions to this figure OR simply keep the person out of PF coverage even if the act is applicable to the establishment and a few employees are covered under it anyway! Then ESI is applicable in "notified areas" (by ESIC) to employees drawing a total salary/wage of Rs. 10,000/- per month.
A similar approach may be taken for other acts depending on their provisions.
If I can help further, kindly do not hesitate!
Regards,
Samvedan
October 12, 2007
From India, Pune
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Hi Sumedha,
The contents of the salary breakup are as below; you can prepare it according to your convenience. HRA would be 50% or 60% of the basic salary.
- Basic
- HRA
- CCA: 825/- is exempted from tax
- Other Allowances
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum = 12 * Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10,000/Month. Anything exceeding this will be covered under Mediclaim or will depend on company policy.
Ex-Gratia/Bonus = A fixed amount as a bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also referred to as CTC.
Apart from this, Food coupons, Holiday packages, and Furnishing items are included in their CTC.
Hope this helps clarify your queries to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
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The contents of the salary breakup are as below; you can prepare it according to your convenience. HRA would be 50% or 60% of the basic salary.
- Basic
- HRA
- CCA: 825/- is exempted from tax
- Other Allowances
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum = 12 * Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10,000/Month. Anything exceeding this will be covered under Mediclaim or will depend on company policy.
Ex-Gratia/Bonus = A fixed amount as a bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also referred to as CTC.
Apart from this, Food coupons, Holiday packages, and Furnishing items are included in their CTC.
Hope this helps clarify your queries to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
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Please take a simple example, i.e., CTC of an employee is ₹1,20,000 per annum.
- BASIC - ₹4000, 40% of monthly gross salary, i.e., ₹10,000 per month
- HRA - ₹2220, 22.20% of monthly gross salary
- SPL PAY - ₹2500, 25% of monthly gross salary
- PF - ₹480, 12% of monthly gross salary
- CONVEYANCE - ₹800 (fixed)
From Switzerland, Zurich
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- BASIC - ₹4000, 40% of monthly gross salary, i.e., ₹10,000 per month
- HRA - ₹2220, 22.20% of monthly gross salary
- SPL PAY - ₹2500, 25% of monthly gross salary
- PF - ₹480, 12% of monthly gross salary
- CONVEYANCE - ₹800 (fixed)
From Switzerland, Zurich
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Hi Sumedha,
I agree with almost everything that Mr. Amit Seth has written, except in two areas:
1. I consider the PF contribution of the employer as 13.61% when calculating CTC.
2. I also include gratuity, as we need to pay it annually to the insurance company. Some companies also include leave cost.
Furthermore, I suggest keeping Basic + DA at around 50% of the monthly gross to benefit the employee, as 40% of Basic & DA (for metro cities) and 30% (for non-metro cities) are exempted as HRA from income tax.
To calculate the monthly gross:
1. Deduct annual payments from CTC, and divide by 12 to obtain the monthly CTC.
2. Determine Basic & DA, and subtract the employer's contributions to PF & ESI.
I hope this information proves helpful to you.
Regards,
Manas Das
From India, Delhi
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I agree with almost everything that Mr. Amit Seth has written, except in two areas:
1. I consider the PF contribution of the employer as 13.61% when calculating CTC.
2. I also include gratuity, as we need to pay it annually to the insurance company. Some companies also include leave cost.
Furthermore, I suggest keeping Basic + DA at around 50% of the monthly gross to benefit the employee, as 40% of Basic & DA (for metro cities) and 30% (for non-metro cities) are exempted as HRA from income tax.
To calculate the monthly gross:
1. Deduct annual payments from CTC, and divide by 12 to obtain the monthly CTC.
2. Determine Basic & DA, and subtract the employer's contributions to PF & ESI.
I hope this information proves helpful to you.
Regards,
Manas Das
From India, Delhi
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