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pampa nandy
Dear,
BSSV
I ask about the same cos just to confirm that whether the same is been laid down anywhere or not. cos after many state Govt. salary review from some of my sources i came to know that they fix the basic min. to 35% to max. is 45%. average you can take a 40% and this percentage is always ins-inc with the minimum wages.
Anyways Thanks a lot for the information.
Regards

From India, Calcutta
BSSV
201

The company may fix any amount of percentage as basic, but not less than 30% and more than 60%. So 35% fixation is the chosen percentage of that particular company.
But to tell you, it mostly depends upon the profitability of the companies and its generosity of sharing it with the employees. There are hardly any companies which pay 60% of basic and most of the companies pay 35% and 40%. The reason behind it is being most of the social security finds and taxation is based on the basic pay calculations. if the basic 60% from the gross 100%, then your deductions would be on 60% so it will be more than what you are paying now. For example, PF on 12% of 60% basic, compared to 12% of 35% on basic, plus admin charges 1.61%apx. Obviously cost to the company is increased, and so with the employees........
So, the concept of incentives, allowances are encouraged more and practiced, not just the good payroll strategy but also a good appraisals and beneficiary tool..........

From India, Bangalore
rainbow123
6

Thank you Dear Vinod, DVD & T Shiva

First of all we should understand basic difference between Gross Salary/Wages & cost to company (CTC). It's true that there is no defined criteria for CTC. Hence there should not be debate on calculation of CTC. Now a days our various colleagues calculate Payment of Gratuity in CTC ???????

Any way now coming to our tread ............ Minimum wages is a bottom line payment of an employee in any Schedule employment in prescribed State & Zone (I, II & III in Maharashtra). Either an employee is getting monthly salary as per minimum wages or less than MW. But if the wages/salary is above MW it is called as Fair Wages, according latest directions of High courts & apex court, an employer is liberal to split employees' salary in to various parts like Basic + Sp allowance/D A & allowances. Employer is liberal to split employees salary in these components if he is paying FAIR WAGES & NOT M W ( refer Group 4 security or Airfreight case).

As specifically described by T Shivasankaran you have to follow a uniform strategy for entire organisation & this time you have to consider a trio of ACT - FACT - TACT.

After all you have to pay EPF contribution of earn Basic + D A or Sp Allowance not on only basic.

All the Best.

Nitin

9820436383

From India, Mumbai
Kalijanni
49

Cost to Company means not to add PF& ESI, only
Which the expenses incurred for a persons to an organization to be considered.
Gratuity, Leave payment, other benefits like mediclaim statutory bonus and incentives also calculated for CTC
Thanks
V K Rao

From India, Guntur
rainbow123
6

Then why don't you add cost of to & fro transportation while attending duty, various training given to an employee during employment, rainy wear, shoues etc etc?
Basically ctc means gross salary + payment of leave, annual bonus, employer's epf,esic, lab welfare fund contribution & other exprenses like canteen, ltc, etc.
But not payment of gratuity.

From India, Mumbai
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