Hi all, I'm working as an HR professional at an IT company. I've been tasked with reworking the salary structure so that we can follow a standard pattern for all employees.
Salary Structure Queries
I would like to know the following:
1. Different salary components.
2. If the basic salary is fixed at 30% of the total salary, how will it affect gratuity calculations?
3. Should bonuses be considered part of the salary?
Please provide your suggestions as I would like to complete this task at the earliest.
Thanks in advance.
Regards,
Hrim
From India, Bangalore
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Salary Structure Queries
I would like to know the following:
1. Different salary components.
2. If the basic salary is fixed at 30% of the total salary, how will it affect gratuity calculations?
3. Should bonuses be considered part of the salary?
Please provide your suggestions as I would like to complete this task at the earliest.
Thanks in advance.
Regards,
Hrim
From India, Bangalore
Acknowledge(0)Amend(0)
Salary Structure Components
The salary structure varies from company to company based on their Compensation & Benefits policy. Some of the basic pay heads used in the salary structure are:
• Basic - 35% - 50% of Gross
• HRA - 40% of Basic for Non-metro & 50% of Basic for Metro
• Con - Max Rs. 800 per month, which is a maximum of Rs. 9600 per year
• Medical Reim - Max Rs. 1250 per month, which can be a maximum of Rs. 15000 per year
• Spl Allow - The balance of Gross will be provided as Special Allowance
Statutory Components
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. 15000
• Employee Contribution - 1.75% on Gross
• Employer Contribution - 4.75% on Gross
PT - It varies from state to state and is calculated based on the Gross salary of the employee.
Net Salary = Gross - PF (Employee Cont) - ESI (Employee Cont) - PT
CTC = Gross + PF (Employer Cont) - ESI (Employer Cont)
Apart from this, Gratuity, Statutory Bonus, LTA, performance bonus, etc., are also used as part of the salary structure.
I hope this helps. Let me know if you need further clarification or assistance.
Regards
From India, Madras
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8The salary structure varies from company to company based on their Compensation & Benefits policy. Some of the basic pay heads used in the salary structure are:
• Basic - 35% - 50% of Gross
• HRA - 40% of Basic for Non-metro & 50% of Basic for Metro
• Con - Max Rs. 800 per month, which is a maximum of Rs. 9600 per year
• Medical Reim - Max Rs. 1250 per month, which can be a maximum of Rs. 15000 per year
• Spl Allow - The balance of Gross will be provided as Special Allowance
Statutory Components
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. 15000
• Employee Contribution - 1.75% on Gross
• Employer Contribution - 4.75% on Gross
PT - It varies from state to state and is calculated based on the Gross salary of the employee.
Net Salary = Gross - PF (Employee Cont) - ESI (Employee Cont) - PT
CTC = Gross + PF (Employer Cont) - ESI (Employer Cont)
Apart from this, Gratuity, Statutory Bonus, LTA, performance bonus, etc., are also used as part of the salary structure.
I hope this helps. Let me know if you need further clarification or assistance.
Regards
From India, Madras
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Suggested Salary Structure Based on Provident Fund Appellate Authority 2001
Keeping in mind the order of the Provident Fund Appellate Authority 2001, the suggested structure is as follows:
For example, anyone whose gross salary is ₹10,000 per month. The minimum wages in Delhi for this category are ₹7,020. The suggested salary structure is as follows:
- 80% of ₹7,020 as basic salary
- 25% of the basic salary as House Rent Allowance (HRA)
- The remaining amount can be allocated for Conveyance and Professional Allowance.
This proposed structure aims to provide a balanced approach.
Regards,
Sushil Kumar
From India, Bangalore
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Keeping in mind the order of the Provident Fund Appellate Authority 2001, the suggested structure is as follows:
For example, anyone whose gross salary is ₹10,000 per month. The minimum wages in Delhi for this category are ₹7,020. The suggested salary structure is as follows:
- 80% of ₹7,020 as basic salary
- 25% of the basic salary as House Rent Allowance (HRA)
- The remaining amount can be allocated for Conveyance and Professional Allowance.
This proposed structure aims to provide a balanced approach.
Regards,
Sushil Kumar
From India, Bangalore
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Earnings
- Basic Salary: 50% of the gross
- HRA: 40% of the Basic
- Conv. Allowance: Rs. 800/- P.M.
- Medical Allowance: Rs. 1250/- P.M.
- Balance you can allocate to Special Allowance
Deductions
- P.F. Employees' contribution at 12% on basic
- E.S.I. Employees' Contribution at 1.75% on Gross
- P.T. depends on slab and varies from state to state.
- TDS on Salary
Net Salary Payable
Net Salary = Earnings (-) Deductions.
From India, Bangalore
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- Basic Salary: 50% of the gross
- HRA: 40% of the Basic
- Conv. Allowance: Rs. 800/- P.M.
- Medical Allowance: Rs. 1250/- P.M.
- Balance you can allocate to Special Allowance
Deductions
- P.F. Employees' contribution at 12% on basic
- E.S.I. Employees' Contribution at 1.75% on Gross
- P.T. depends on slab and varies from state to state.
- TDS on Salary
Net Salary Payable
Net Salary = Earnings (-) Deductions.
From India, Bangalore
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Gross = Basic + DA + HRA + Conveyance + Others. Net Salary = Gross - PF (Emp Cont) - ESI (Emp Cont) - PT. CTC = Gross + PF (Employer Cont) - ESI (Employer Cont). Apart from this, Medical Allowance, Gratuity, Statutory Bonus, LTA, performance bonus, etc., are also used as part of the salary structure (CTC).
Best Regards,
Vishnu V Reddy
Sr. Executive - HR
From India, Hyderabad
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Best Regards,
Vishnu V Reddy
Sr. Executive - HR
From India, Hyderabad
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Gross = Basic + DA + HRA + Conveyance + Others.
Net Salary = Gross - PF (Employee Contribution) - ESI (Employee Contribution) - PT
CTC = Gross + PF (Employer Contribution) - ESI (Employer Contribution)
In addition to this, Medical Allowance, Gratuity, Statutory Bonus, LTA, performance bonus, etc., are also considered part of the salary structure (CTC).
Best Regards,
Vishnu V Reddy Sr. Executive-HR
From India, Hyderabad
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Net Salary = Gross - PF (Employee Contribution) - ESI (Employee Contribution) - PT
CTC = Gross + PF (Employer Contribution) - ESI (Employer Contribution)
In addition to this, Medical Allowance, Gratuity, Statutory Bonus, LTA, performance bonus, etc., are also considered part of the salary structure (CTC).
Best Regards,
Vishnu V Reddy Sr. Executive-HR
From India, Hyderabad
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