Please help to understand standard salary structure or component of salary and how to prepare salary of a new joinee if given.
From India, New Delhi
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5From India, New Delhi
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Various companies have different kinds of salary breakup structures. However, here are the components for your reference:
Basic Salary
- Basic = 40% - 50% of Gross
House Rent Allowance (HRA)
- HRA = 40% of basic for Non-Metro and 50% of basic for Metro cities
Conveyance Allowance
- Max. up to Rs. 800 per mensem and Rs. 9600 per annum
Medical Reimbursements
- Max. Rs. 1250 per mensem and Rs. 15000 per annum
Special Allowance
- The balance of the Gross is calculated as the special allowance
Apart from the above, you need to look for statutory contributions:
1. ESI (Employees' State Insurance)
- Applicable for employees whose gross salary is less than or equal to Rs. 15000 per mensem:
- Employee Contribution: 1.75% on gross
- Employer Contribution: 4.75% on gross
2. Provident Fund (PF)
- Employee Contribution: 12% of basic
- Employer Contribution: 13.61% on basic
Professional tax varies from state to state. For a new joiner, you can always prepare a salary by:
- Net salary = Gross minus PF (Employee Contribution) minus ESI (Employee Contribution) minus Professional Tax
- CTC = Gross + PF (Employer Contribution) + ESI (Employer Contribution)
If the salary of the employee joining you is highly paid, then you may also use the special allowance that is to be paid through petrol allowance, food coupons, LTA, etc.
Regards
From India, Visakhapatnam
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Basic Salary
- Basic = 40% - 50% of Gross
House Rent Allowance (HRA)
- HRA = 40% of basic for Non-Metro and 50% of basic for Metro cities
Conveyance Allowance
- Max. up to Rs. 800 per mensem and Rs. 9600 per annum
Medical Reimbursements
- Max. Rs. 1250 per mensem and Rs. 15000 per annum
Special Allowance
- The balance of the Gross is calculated as the special allowance
Apart from the above, you need to look for statutory contributions:
1. ESI (Employees' State Insurance)
- Applicable for employees whose gross salary is less than or equal to Rs. 15000 per mensem:
- Employee Contribution: 1.75% on gross
- Employer Contribution: 4.75% on gross
2. Provident Fund (PF)
- Employee Contribution: 12% of basic
- Employer Contribution: 13.61% on basic
Professional tax varies from state to state. For a new joiner, you can always prepare a salary by:
- Net salary = Gross minus PF (Employee Contribution) minus ESI (Employee Contribution) minus Professional Tax
- CTC = Gross + PF (Employer Contribution) + ESI (Employer Contribution)
If the salary of the employee joining you is highly paid, then you may also use the special allowance that is to be paid through petrol allowance, food coupons, LTA, etc.
Regards
From India, Visakhapatnam
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I agree with Sharmila. She has mentioned the best breakup options for a fresher's salary.
There are also some online tools available to get the salary breakups. You can search for them on Google or use a take-home salary calculator for India.
The calculator works in the reverse way, i.e., you have to enter the basic, HRA, and other values, and it will show you the CTC and take-home values. You can use it for your purpose of creating the CTC letter as well.
From India, Delhi
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There are also some online tools available to get the salary breakups. You can search for them on Google or use a take-home salary calculator for India.
The calculator works in the reverse way, i.e., you have to enter the basic, HRA, and other values, and it will show you the CTC and take-home values. You can use it for your purpose of creating the CTC letter as well.
From India, Delhi
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Hello Safia Zaidi Sharmila das has explained nicely. I am just attaching sheet which contains breakup of salary and you can calculate TDS also.
From India, Pune
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From India, Pune
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Why is the Conveyance Rs. 800/- Per Month and Medical Rs. 1250/- Per Month?
These amounts are exempted from income tax. Both of these amounts may be fixed at a higher rate. There is no hard and fast rule to fix these two amounts.
From India, Mumbai
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These amounts are exempted from income tax. Both of these amounts may be fixed at a higher rate. There is no hard and fast rule to fix these two amounts.
From India, Mumbai
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Dear Sharmila, That was informative , but what if the salary is given in CTC ...then how can we make the breakup ?..pls suggest
From India, Kochi
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From India, Kochi
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ESIC Countable on Gross Salary,It includes Basic+D.A.+Allowances (All Allowances Except washing Allowances)
From India, Mumbai
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From India, Mumbai
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Dear Mr. Greek John,
For the CTC, it needs to be Gross salary, i.e., (Basic + HRA + Conveyance + Medical Reimbursement + Special Allowance) + PF (Employer's Contribution) + ESI (Employer's Contribution).
From India, Visakhapatnam
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For the CTC, it needs to be Gross salary, i.e., (Basic + HRA + Conveyance + Medical Reimbursement + Special Allowance) + PF (Employer's Contribution) + ESI (Employer's Contribution).
From India, Visakhapatnam
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Dear Seniors , I am good with salary components . I need someone help for salary fixation , how do we fix salary for employee ,i.e sales man?
From India, Gurgaon
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From India, Gurgaon
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The question about why the Medical allowance is fixed at a low rate has not been answered. can anyone please explain that?
From India, Mumbai
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From India, Mumbai
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SALARY SHEET CALCULATION.xls
Salary calculation.doc