Dear All,
We are a small firm having 35-50 employees. Up to now, we have been following the salary structure as follows:
Basic - Random; most employees receive $6500 as basic
HRA - NIL
Conv - $800 per month
Allowance - Balance Amount (Gross - Basic - HRA - Conveyance Allowance)
Gross - XYZ amount
PF - 12%
PT - As per law
TDS - TDS as per law on Gross Salary
Net - ABC amount
I recently joined, and after reviewing, I have noted some points that I would like to share with you:
1. Basic is random and close to the ceiling limit of PF. I changed it to 30%-40%
2. HRA should be 30%-40% of Basic
3. Allowance should not be a balance amount
4. TDS should not be charged on Gross; PF and PT should be deducted, and then TDS should be calculated.
I understand that none of the amounts should exceed Basic in the salary structure. I want to reframe this salary format and need your help with it. I have never handled the payroll function before, and this presents a new challenge in my role. I seek your assistance.
Thank you.
From India, Mumbai
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7We are a small firm having 35-50 employees. Up to now, we have been following the salary structure as follows:
Basic - Random; most employees receive $6500 as basic
HRA - NIL
Conv - $800 per month
Allowance - Balance Amount (Gross - Basic - HRA - Conveyance Allowance)
Gross - XYZ amount
PF - 12%
PT - As per law
TDS - TDS as per law on Gross Salary
Net - ABC amount
I recently joined, and after reviewing, I have noted some points that I would like to share with you:
1. Basic is random and close to the ceiling limit of PF. I changed it to 30%-40%
2. HRA should be 30%-40% of Basic
3. Allowance should not be a balance amount
4. TDS should not be charged on Gross; PF and PT should be deducted, and then TDS should be calculated.
I understand that none of the amounts should exceed Basic in the salary structure. I want to reframe this salary format and need your help with it. I have never handled the payroll function before, and this presents a new challenge in my role. I seek your assistance.
Thank you.
From India, Mumbai
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(Fact Checked)-The method to arrive at CTC (Cost to Company) for an employee is by considering the total of all direct and indirect expenses incurred by the company for that employee. It includes salary components like Basic, HRA, Conveyance, Special Allowance, PF contributions, Gratuity, Bonus, Medical Insurance, etc. Additionally, employer's contributions to PF, ESI, and any other benefits provided should be included in the CTC calculation. Ensure compliance with all legal requirements and maintain transparency in communicating the CTC to employees. (1 Acknowledge point)