Dear Seniors, Please help me out, I am working on the payroll policy for an MNC company. I need your help on how to create it, considering components like LTA and Ex gratia in the salary breakup. I need guidance on how and when LTA and Ex gratia should be given to employees and how to calculate the same. Your prompt assistance on this matter is highly appreciated as I need to finalize the payroll policy for employees.
Regards, Preeti
From India, Bangalore
Acknowledge(0)
Amend(0)
1Regards, Preeti
From India, Bangalore
Acknowledge(0)Amend(0)
Normally, LTA will be calculated at 10% on Basic + DA and it can be paid immediately after the calendar year ends (during the first week of January).
Ex-gratia and Bonus Calculation
Ex-gratia is otherwise known as a Bonus, which has to be paid as per the Payment of Bonus Act 1965. ₹3,500 is the ceiling limit for calculating 20% of the bonus, which is ₹700 per month. It can be paid to the employees during festivals like Ayudha Pooja, Deepavali, etc.
Regards,
Sree
From India, Delhi
Acknowledge(0)Amend(0)
Ex-gratia and Bonus Calculation
Ex-gratia is otherwise known as a Bonus, which has to be paid as per the Payment of Bonus Act 1965. ₹3,500 is the ceiling limit for calculating 20% of the bonus, which is ₹700 per month. It can be paid to the employees during festivals like Ayudha Pooja, Deepavali, etc.
Regards,
Sree
From India, Delhi
Acknowledge(0)Amend(0)
Hi Preeti, In case you do not intend to pay yearly, you can divide the same mentioned above by 12 & pay it as a part of monthly gross salary component.
From India, Ahmedabad
Acknowledge(0)Amend(0)
From India, Ahmedabad
Acknowledge(0)Amend(0)
Thanks to both of you for your replies. I have pasted the salary structure (CTC) to understand more clearly. Please let me know how to calculate LTA & Ex-gratia for the same. Here, both are part of CTC, and gratuity is also included, deducting the same as a provision. LTA & Ex-gratia are not paid on a monthly basis, so what is the ideal time to pay them to employees, and is there any policy regarding this? Please share it with me (payroll policy).
Please reply ASAP.
Thanks,
Preeti
INR Per Month INR Per Annum
Monthly Payments
- Basic: 25,000
- HRA: 12,500
- Educational Allowance: 100
- Conveyance: 800
- Special Allowance: 12,398
- Phone Allowance
- Medical: 1,250
- Petrol Allowance
- Driver Allowance
- Reimbursement of Expenses
Monthly Gross Sub Total: 52,048 6,24,577
Annual Payments
- Ex-Gratia: 12,500
- LTA: 12,500
Benefits
- Provident Fund: 36,000
- Gratuity: 14,423
- Mediclaim
- Superannuation
Fixed Total: 7,00,000
Total Gross Salary INR. Per Annum: 7,00,000
From India, Bangalore
Acknowledge(0)Amend(0)
Please reply ASAP.
Thanks,
Preeti
INR Per Month INR Per Annum
Monthly Payments
- Basic: 25,000
- HRA: 12,500
- Educational Allowance: 100
- Conveyance: 800
- Special Allowance: 12,398
- Phone Allowance
- Medical: 1,250
- Petrol Allowance
- Driver Allowance
- Reimbursement of Expenses
Monthly Gross Sub Total: 52,048 6,24,577
Annual Payments
- Ex-Gratia: 12,500
- LTA: 12,500
Benefits
- Provident Fund: 36,000
- Gratuity: 14,423
- Mediclaim
- Superannuation
Fixed Total: 7,00,000
Total Gross Salary INR. Per Annum: 7,00,000
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
LTA Policy.doc