Dear Sir,
- Could you please provide information on how to prepare CTC?
- Which points should be considered when preparing CTC?
- What percentages should be used for calculating Basic, HRA, Education Allowances, TA, Convenience, LTA, as per statutory requirements?
- Any other necessary information related to CTC.
Please provide the above information.
Thank you.
Srihari
From India, Pune
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2- Could you please provide information on how to prepare CTC?
- Which points should be considered when preparing CTC?
- What percentages should be used for calculating Basic, HRA, Education Allowances, TA, Convenience, LTA, as per statutory requirements?
- Any other necessary information related to CTC.
Please provide the above information.
Thank you.
Srihari
From India, Pune
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Dear Sir,
Could you please provide information on how to prepare CTC? What points should be considered when preparing CTC? Which percentages should be used for calculating Basic, HRA, Education Allowances, TA, Convenience, LTA as per statutory requirements? Additionally, any other necessary information related to CTC would be appreciated.
Please provide the above information.
Thank you,
Srihari
From India, Pune
Acknowledge(0)Amend(0)
Could you please provide information on how to prepare CTC? What points should be considered when preparing CTC? Which percentages should be used for calculating Basic, HRA, Education Allowances, TA, Convenience, LTA as per statutory requirements? Additionally, any other necessary information related to CTC would be appreciated.
Please provide the above information.
Thank you,
Srihari
From India, Pune
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For 16lpa, how should the CTC structure looks like with Max tax benefits? (interms of basic salary %, HRA..)
From India, Salem
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From India, Salem
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Dear Colleague, your question is: "16 LPA, how should the CTC structure look like with maximum tax benefits?" (in terms of basic salary %, HRA, etc.)
Recently, I replied to a similar question, which I will share with you for your broader understanding. For a CTC of 16 LPA, you may work out the details based on your compensation policy, considering the broad aspects given below, with the help of your internal team and finance department.
This is a question that should be answered internally as per your organization's compensation policy. Consider factors such as the employer's paying capacity, legal or statutory requirements, hiring power, and the importance of the role. High-value jobs will attract higher salaries and attractive components, while lower-skilled jobs will attract minimum wage levels. This is a significant subject that the Compensation and Benefits Manager must derive in line with deeper discussions with business leaders.
General Guidelines
A) Basic Salary: The basic salary is an important component of the salary structure and should be fixed judiciously, as most statutory benefits will be based on this component. It is included for deductions such as PF, ESI, and gratuity. The basic salary may comprise 35-50% of the total salary.
B) Dearness Allowance: This is a certain percentage of the basic salary paid to employees, connected to the cost of living index.
C) HRA: A house rent allowance is paid to employees for meeting the cost of renting accommodation. This component may work out to 20% to 30% of the basic salary, depending on the location where the employee is posted.
D) Conveyance Allowance: This is offered by employers to compensate employees for their travel expenses to and from their residence and workplace.
E) Leave Travel Allowance: This allowance is eligible for tax exemption and is offered to cover the employee's travel expenses when on leave.
F) Medical Allowance: A fixed allowance paid to meet employees' medical expenses.
G) Books and Periodicals Allowance or Professional Development Allowance: Paid for the development of employees.
H) Vehicle Hire Charges
I) Health Insurance Component/Premium
J) Performance Pay or Incentives
K) Bonus Component: As per the Bonus Act or voluntary bonus.
L) Other Components: As you may decide.
You need to include statutory components like gratuity. According to the Payment of Gratuity Act, 1972, gratuity is calculated as 4.81% of the basic pay. Most firms with a workforce of 10 or more employees come under the Act.
Employee Provident Fund: At least 12% of an employee’s basic salary is automatically deducted and goes to the Employee Provident Fund every month. The contributions are maintained by the Employees Provident Fund Organization (EPFO).
Professional Tax: A tax levied on the income earned by salaried employees and professionals, which may be indicated in the structure.
Perquisites: Fringe benefits are generally non-cash benefits given in addition to the cash salary.
ESIC: If the gross salary is below Rs. 21,000 per month, the employer is required to cover the employee under ESI. The employer's contribution will be 4.75% of the gross salary, whereas the employee's contribution will be 1.75% of the gross salary.
From India, Chennai
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Recently, I replied to a similar question, which I will share with you for your broader understanding. For a CTC of 16 LPA, you may work out the details based on your compensation policy, considering the broad aspects given below, with the help of your internal team and finance department.
This is a question that should be answered internally as per your organization's compensation policy. Consider factors such as the employer's paying capacity, legal or statutory requirements, hiring power, and the importance of the role. High-value jobs will attract higher salaries and attractive components, while lower-skilled jobs will attract minimum wage levels. This is a significant subject that the Compensation and Benefits Manager must derive in line with deeper discussions with business leaders.
General Guidelines
A) Basic Salary: The basic salary is an important component of the salary structure and should be fixed judiciously, as most statutory benefits will be based on this component. It is included for deductions such as PF, ESI, and gratuity. The basic salary may comprise 35-50% of the total salary.
B) Dearness Allowance: This is a certain percentage of the basic salary paid to employees, connected to the cost of living index.
C) HRA: A house rent allowance is paid to employees for meeting the cost of renting accommodation. This component may work out to 20% to 30% of the basic salary, depending on the location where the employee is posted.
D) Conveyance Allowance: This is offered by employers to compensate employees for their travel expenses to and from their residence and workplace.
E) Leave Travel Allowance: This allowance is eligible for tax exemption and is offered to cover the employee's travel expenses when on leave.
F) Medical Allowance: A fixed allowance paid to meet employees' medical expenses.
G) Books and Periodicals Allowance or Professional Development Allowance: Paid for the development of employees.
H) Vehicle Hire Charges
I) Health Insurance Component/Premium
J) Performance Pay or Incentives
K) Bonus Component: As per the Bonus Act or voluntary bonus.
L) Other Components: As you may decide.
You need to include statutory components like gratuity. According to the Payment of Gratuity Act, 1972, gratuity is calculated as 4.81% of the basic pay. Most firms with a workforce of 10 or more employees come under the Act.
Employee Provident Fund: At least 12% of an employee’s basic salary is automatically deducted and goes to the Employee Provident Fund every month. The contributions are maintained by the Employees Provident Fund Organization (EPFO).
Professional Tax: A tax levied on the income earned by salaried employees and professionals, which may be indicated in the structure.
Perquisites: Fringe benefits are generally non-cash benefits given in addition to the cash salary.
ESIC: If the gross salary is below Rs. 21,000 per month, the employer is required to cover the employee under ESI. The employer's contribution will be 4.75% of the gross salary, whereas the employee's contribution will be 1.75% of the gross salary.
From India, Chennai
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Salary less tax - CTC.xls