HI FRIENDS,
The importance of friendly salary package is seen now especially after the introduction of Fringe Benefit Tax.
All those employers who are interested to make available friendly salary package for their employees should prepare special salary package based on tax planning theme especially in the context of Fringe Benefit Tax payable by the employer.
In the first place, the HR friendly modules in the present scenario for employees and directors should cover the theme of
(1) Think and then ink the salary package of an employee
(2) Scrap superannuation fund contributions
(3) Pass on FBT to employees based on CTC concept
(4) Tailor-made different proposals.
The following guidelines will help every corporate taxpayer plan salary and perquisite packages for its employees;
A - Salary Module for Junior Employees .
For all junior employees, the salary and perquisites module should be very simple and easy to implement.
2. Except transport allowance, just add all payments to salary income. Do not give medical reimbursements – let it be added with salary or grant theme medical allowance so as to save FBT.
3. Pay zero FBT in respect of payments to junior employees and thus let 'gross salary' be taxed in their hands – still most of them will not pay any income-tax because their taxable income will be below Rs.1 to 1.35 lakhs (after tax deduction under section 80C).
B – Salary Module for Middle Level Executives
The theme: Mix and match FBT
1. Instead of making payment of 'salary', the total emoluments can be bifurcated so as to suffer a little tax by the employee on perquisites but very less FBT.
2. Consider the following in drafting this module:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• .LTA AS PER LAW.
(C- Salary Module for Senior Level Executives
1. The theme: A little more pain to bring lower perquisite taxation and increase FBT payout which may be considered in CTC
2. Consider the following:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• Reimbursements of food expenses in club/hotel
• HRA OR RENT FREE ACCOMODATION
• LTA AS PER LAW.
• UNIFORM ALLOWANCE
• REIMBURSEMENT OF CAR EXPENSES OR CONVEYANCE ALLOW
BY APPLYING THESE U CAN WORKOUT THE BREAKUPS AT DIFFERENT LEVELS
KATYANA
From India, Gurgaon
Acknowledge(0)
Amend(0)
36The importance of friendly salary package is seen now especially after the introduction of Fringe Benefit Tax.
All those employers who are interested to make available friendly salary package for their employees should prepare special salary package based on tax planning theme especially in the context of Fringe Benefit Tax payable by the employer.
In the first place, the HR friendly modules in the present scenario for employees and directors should cover the theme of
(1) Think and then ink the salary package of an employee
(2) Scrap superannuation fund contributions
(3) Pass on FBT to employees based on CTC concept
(4) Tailor-made different proposals.
The following guidelines will help every corporate taxpayer plan salary and perquisite packages for its employees;
A - Salary Module for Junior Employees .
For all junior employees, the salary and perquisites module should be very simple and easy to implement.
2. Except transport allowance, just add all payments to salary income. Do not give medical reimbursements – let it be added with salary or grant theme medical allowance so as to save FBT.
3. Pay zero FBT in respect of payments to junior employees and thus let 'gross salary' be taxed in their hands – still most of them will not pay any income-tax because their taxable income will be below Rs.1 to 1.35 lakhs (after tax deduction under section 80C).
B – Salary Module for Middle Level Executives
The theme: Mix and match FBT
1. Instead of making payment of 'salary', the total emoluments can be bifurcated so as to suffer a little tax by the employee on perquisites but very less FBT.
2. Consider the following in drafting this module:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• .LTA AS PER LAW.
(C- Salary Module for Senior Level Executives
1. The theme: A little more pain to bring lower perquisite taxation and increase FBT payout which may be considered in CTC
2. Consider the following:
• Transport Allowance.
• .MEDICAL REIMBURSEMENT UPTO RS. 15 K PER ANNUM
• FOOD COUPONS
• Reimbursements of food expenses in club/hotel
• HRA OR RENT FREE ACCOMODATION
• LTA AS PER LAW.
• UNIFORM ALLOWANCE
• REIMBURSEMENT OF CAR EXPENSES OR CONVEYANCE ALLOW
BY APPLYING THESE U CAN WORKOUT THE BREAKUPS AT DIFFERENT LEVELS
KATYANA
From India, Gurgaon
Acknowledge(0)Amend(0)
Hi Vivek,
FBT is a part of employees' CTC, so employees can bear the tax. Yes, you can introduce the choice pay to your employees because by doing so, they can opt for reimbursements of their choice and save tax.
In the salary breakup, the term "spl allowance" means the remaining balance amount of salary. So, if somebody wants to have more in-hand salary, then we can put the reimbursements amount in that heading (if he is not willing to take reimbursements).
I do hope that I have clarified your query.
Katayna
From India, Gurgaon
Acknowledge(0)Amend(0)
FBT is a part of employees' CTC, so employees can bear the tax. Yes, you can introduce the choice pay to your employees because by doing so, they can opt for reimbursements of their choice and save tax.
In the salary breakup, the term "spl allowance" means the remaining balance amount of salary. So, if somebody wants to have more in-hand salary, then we can put the reimbursements amount in that heading (if he is not willing to take reimbursements).
I do hope that I have clarified your query.
Katayna
From India, Gurgaon
Acknowledge(0)Amend(0)
Hi Katyana,
Your above suggestion for a friendly salary package is fine and really appreciable. Thank you for your thoughts.
I kindly request you to provide a sample spreadsheet of the format with necessary calculation steps and formulas. Please do not consider the expectation as too much.
Regards,
Bhaskar
From India, Bangalore
Acknowledge(0)Amend(0)
Your above suggestion for a friendly salary package is fine and really appreciable. Thank you for your thoughts.
I kindly request you to provide a sample spreadsheet of the format with necessary calculation steps and formulas. Please do not consider the expectation as too much.
Regards,
Bhaskar
From India, Bangalore
Acknowledge(0)Amend(0)
Hi Seniors,
Are there any rules or laws regarding the fixing of the scale of senior management, or does it depend on the company's profitability and capacity? Also, the same question applies to salary breakdowns.
For example, in my company, the HRA is 50% of the Basic salary, but in metro cities, most companies have it at 40% of the basic salary. Can you provide me with some ideas and details of the salary breakup format, please?
Thank you.
From India, Mumbai
Acknowledge(1)
Amend(0)
Are there any rules or laws regarding the fixing of the scale of senior management, or does it depend on the company's profitability and capacity? Also, the same question applies to salary breakdowns.
For example, in my company, the HRA is 50% of the Basic salary, but in metro cities, most companies have it at 40% of the basic salary. Can you provide me with some ideas and details of the salary breakup format, please?
Thank you.
From India, Mumbai
Acknowledge(1)Amend(0)
Hi Ram,
There is no such law governing the fixation of salary structures for senior management. It entirely depends on the company's internal policy on compensation. The percentage of basic salary can vary from 30% to 60% of the Cost to Company (CTC). There are no strict rules regarding this.
For the salary breakup format, please find the attachment that we use in our company.
KATYANA
From India, Gurgaon
Acknowledge(3)
Amend(0)
There is no such law governing the fixation of salary structures for senior management. It entirely depends on the company's internal policy on compensation. The percentage of basic salary can vary from 30% to 60% of the Cost to Company (CTC). There are no strict rules regarding this.
For the salary breakup format, please find the attachment that we use in our company.
KATYANA
From India, Gurgaon
Acknowledge(3)Amend(0)
Thank you Katyana, information is most useful. Do you think we can also add Child/Children Education for senior members as well in the salary structure? regards Sourabh
From India, Delhi
Acknowledge(0)Amend(0)
0
0
From India, Delhi
Acknowledge(0)Amend(0)CiteHR.AI
(Fact Checked)-The addition of Child/Children Education for senior members in the salary structure is a valid consideration to enhance benefits and attract talent. (1 Acknowledge point)
0
0
THNX A LOTT...FOR SHARING..... PLS KEEP IT UP IN FUTURE ALSO...WHEN INDUSTRY INVENTS NEW COMPONENTS.... REGARDS NAMITABH :):):):):)
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Dear Katyana, Your suggestion is superb, and could you plz throw light on LTA component, when u say as per law? is this the max. limit you r talking about? Plz advise. Sashmita
From India, Delhi
Acknowledge(1)Amend(0)
From India, Delhi
Acknowledge(1)Amend(0)
Hi sashmita, Pl go through my posting — — — — -10 THINGS U SHOULD KNOW ABOUT LTA. U WILL GET THE ANSWER OF YOYR QUERY. KATYANA
From India, Gurgaon
Acknowledge(0)Amend(0)
From India, Gurgaon
Acknowledge(0)Amend(0)
Thank you, friends. Please, if you can help in detecting any salary leakage that generally happens at the end of every month. For example, if the payroll cycle is from the 21st to the 20th, and by the 28th, payroll is usually completed. Now, if any employee is on leave or in suspension mode for a week and then tenders their resignation on the 29th, how could we prevent these instances of salary leakage? If you have any format for addressing this issue, I kindly request you to share it with me as urgently needed. Thank you, Zia Jafri, Gurgaon.
From India, New Delhi
Acknowledge(1)
Amend(0)
0
0
From India, New Delhi
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-The issue of preventing salary leakage due to employees leaving or being on leave is crucial. To address this, timely communication and process controls are essential. Regularly updating and monitoring leave records can help prevent such leakages effectively. (1 Acknowledge point)
0
0
Dear sir,
I have received an offer letter as below, in which they have not considered any PF deduction. Please help in this regard.
Please find attached herewith a scanned copy of your offer letter with your salary details. Your monthly gross salary is Rs. 50,169/- plus Rs. 3500/- as reimbursements (to save tax). So, your effective gross monthly salary is Rs. 53,669/-. You need to manage your taxation part as there will be no deduction on the PF part. You will be provided with an official mobile number with a monthly usage of up to Rs. 2000/-, local conveyance of Rs. 5000/- per month, and you will also receive LTA and ex-gratia bonus.
Thanks and Regards, Rajesh.B
From India, Bangalore
Acknowledge(1)Amend(0)
I have received an offer letter as below, in which they have not considered any PF deduction. Please help in this regard.
Please find attached herewith a scanned copy of your offer letter with your salary details. Your monthly gross salary is Rs. 50,169/- plus Rs. 3500/- as reimbursements (to save tax). So, your effective gross monthly salary is Rs. 53,669/-. You need to manage your taxation part as there will be no deduction on the PF part. You will be provided with an official mobile number with a monthly usage of up to Rs. 2000/-, local conveyance of Rs. 5000/- per month, and you will also receive LTA and ex-gratia bonus.
Thanks and Regards, Rajesh.B
From India, Bangalore
Acknowledge(1)Amend(0)
Hello all,
When discussing salary breakdowns, most candidates are interested in understanding their take-home pay after deductions such as PF and Income Tax. Could you also please shed light on how to calculate the net salary after deducting tax for a candidate falling under a 30% tax slab or any other applicable tax bracket?
Regards,
Anjali
From India, New Delhi
Acknowledge(0)Amend(0)
When discussing salary breakdowns, most candidates are interested in understanding their take-home pay after deductions such as PF and Income Tax. Could you also please shed light on how to calculate the net salary after deducting tax for a candidate falling under a 30% tax slab or any other applicable tax bracket?
Regards,
Anjali
From India, New Delhi
Acknowledge(0)Amend(0)
Dear Seniors, Kindly help me with a spread sheet for a salary break up for an engineering firm. Annual CTC is Rs.380000.
From India, Pune
Acknowledge(0)Amend(0)
From India, Pune
Acknowledge(0)Amend(0)
Hey Guys,
This is Tushar Chauhan. I want to know the new CTC structure with percentages because many rules have changed in the new financial year. Therefore, I request all concerned and seniors to please provide me the details at my email ID (smaslksmhr@gmail.com).
Thanks & Regards,
Tushar Chauhan
From India, Mumbai
Acknowledge(0)Amend(0)
This is Tushar Chauhan. I want to know the new CTC structure with percentages because many rules have changed in the new financial year. Therefore, I request all concerned and seniors to please provide me the details at my email ID (smaslksmhr@gmail.com).
Thanks & Regards,
Tushar Chauhan
From India, Mumbai
Acknowledge(0)Amend(0)
How to perpare HR pay plan for various department. kndly share if anyone has it in excel format Thanks, Ahmed (write2sta@gmail.com)
From India, Bengaluru
Acknowledge(0)Amend(0)
From India, Bengaluru
Acknowledge(0)Amend(0)Gathering data for an AI comment.... Sending emails to relevant members...
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.
Typical salary breakup.jpg
Creating a Competitive Salary Structure.doc
Compensation Structure.ppt
CiteHR.AI
(Fact Checked)-Based on the latest laws and practices, the salary break-up percentages like HRA can vary based on company policy and city location, not on laws. Customization is common. (1 Acknowledge point)