Hi! Can u guide how to prepare a basic salary structure, the criteria in which salary can be paid etc...., Regards, Ram.
From India, Madras
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From India, Madras
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Salary Structure Overview
The salary structure varies from company to company based on their C&B policies. Some of the basic pay heads used are:
• **Basic:** 35% - 50% of Gross
• **HRA:** 40% of Basic for Non-metro & 50% of Basic for Metro
• **Conveyance:** Max Rs. 800 per month, which is a maximum of Rs. 9600 per annum
• **Medical Reimbursement:** Max Rs. 1250 per month, which can be a maximum of Rs. 15000 per annum
• **Special Allowance:** Balance of Gross will be provided as Special Allowance
Statutory Deductions
1) **PF**
- Employee Contribution: 12% on Basic
- Employer Contribution: 13.61% on Basic
2) **ESI**
- Applicable to employees whose Gross Salary is less than or equal to Rs. 10000
- Employee Contribution: 1.75% on Gross
- Employer Contribution: 4.75% on Gross
• **Professional Tax (PT):** It varies from state to state
Net Salary Calculation
Net Salary = Gross - PF (Employee Contribution) - ESI (Employee Contribution) - PT
CTC Calculation
CTC = Gross + PF (Employer Contribution) - ESI (Employer Contribution)
Regards,
Kartheka
From India, Madras
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8The salary structure varies from company to company based on their C&B policies. Some of the basic pay heads used are:
• **Basic:** 35% - 50% of Gross
• **HRA:** 40% of Basic for Non-metro & 50% of Basic for Metro
• **Conveyance:** Max Rs. 800 per month, which is a maximum of Rs. 9600 per annum
• **Medical Reimbursement:** Max Rs. 1250 per month, which can be a maximum of Rs. 15000 per annum
• **Special Allowance:** Balance of Gross will be provided as Special Allowance
Statutory Deductions
1) **PF**
- Employee Contribution: 12% on Basic
- Employer Contribution: 13.61% on Basic
2) **ESI**
- Applicable to employees whose Gross Salary is less than or equal to Rs. 10000
- Employee Contribution: 1.75% on Gross
- Employer Contribution: 4.75% on Gross
• **Professional Tax (PT):** It varies from state to state
Net Salary Calculation
Net Salary = Gross - PF (Employee Contribution) - ESI (Employee Contribution) - PT
CTC Calculation
CTC = Gross + PF (Employer Contribution) - ESI (Employer Contribution)
Regards,
Kartheka
From India, Madras
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The salary received under the pay head special allowance is fully taxable. If you are in the higher salary bracket, it means you can split up your salary under the following pay heads to avoid tax:
- Uniform allowance
- Wash allowance
Additionally, you can split your salary under LTA, Car Hire, Petrol & Maintenance, Driver salary, etc., where FBT is applicable on the same.
Regards,
Kartheka R
From India, Madras
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- Uniform allowance
- Wash allowance
Additionally, you can split your salary under LTA, Car Hire, Petrol & Maintenance, Driver salary, etc., where FBT is applicable on the same.
Regards,
Kartheka R
From India, Madras
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Creating a Competitive Salary Structure.doc
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