Hi All,
I am working in the garment retail industry. I am a new employee on the floor and I need your help in understanding the salary breakdown.
I have a problem in understanding the salary breakdown. Do we have any percentage for items such as DA, HRA, CA, special allowance, conveyance, and other allowances? Is it calculated by percentage or by a specific amount?
What are the components of the salary breakdown? Does the breakdown vary from management to management? Please help me with this.
Thanks and Regards,
Sriram V B
From India, Madras
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3I am working in the garment retail industry. I am a new employee on the floor and I need your help in understanding the salary breakdown.
I have a problem in understanding the salary breakdown. Do we have any percentage for items such as DA, HRA, CA, special allowance, conveyance, and other allowances? Is it calculated by percentage or by a specific amount?
What are the components of the salary breakdown? Does the breakdown vary from management to management? Please help me with this.
Thanks and Regards,
Sriram V B
From India, Madras
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Hi Sriram,
Greetings,
The basic amount is to be calculated at 40% of the Cost to Company (CTC).
House Rent Allowance (HRA) is to be calculated at 40% of the basic salary.
Medical Allowance is fixed at $1250.
Special Allowance will be the remaining balance.
Additionally, you have to deduct PF at 12% of the basic salary and Professional Tax as applicable.
This is the basic information.
Cheers,
Geetanjali
From India, Pune
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Greetings,
The basic amount is to be calculated at 40% of the Cost to Company (CTC).
House Rent Allowance (HRA) is to be calculated at 40% of the basic salary.
Medical Allowance is fixed at $1250.
Special Allowance will be the remaining balance.
Additionally, you have to deduct PF at 12% of the basic salary and Professional Tax as applicable.
This is the basic information.
Cheers,
Geetanjali
From India, Pune
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Hi Geetanjali,
Greetings,
Firstly, I would like to thank you for your reply.
My company calculates in a different manner; I don't think we calculate on any percentages.
I think the break-up differs from management to management. There are lots of differences in what percentage you have given to me.
I have some other questions. Is the below break-up as per Tamil Nadu:
(1) Basic Pay - 2500 and above, HRA will be taken into account
(2) Basic Pay - < 2500, DA will be taken into account.
(3) Conveyance, special allowances, and other allowances, etc., come below those above as per the percentage (my question).
(4) Deductions PF, ESI, PT as per the law.
(5) Mediclaim, max is 1250, minimum any amount. (deduction for months in a year)
(6) Holiday Allowances as per the holidays allowed in FORM V
Does the percentage differ from company to company or is it the same as per the government law? Am I correct, or are there any mistakes in the above? Please correct me if I have gone wrong in any place.
Thanks and Regards,
Sriram V B
From India, Madras
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Greetings,
Firstly, I would like to thank you for your reply.
My company calculates in a different manner; I don't think we calculate on any percentages.
I think the break-up differs from management to management. There are lots of differences in what percentage you have given to me.
I have some other questions. Is the below break-up as per Tamil Nadu:
(1) Basic Pay - 2500 and above, HRA will be taken into account
(2) Basic Pay - < 2500, DA will be taken into account.
(3) Conveyance, special allowances, and other allowances, etc., come below those above as per the percentage (my question).
(4) Deductions PF, ESI, PT as per the law.
(5) Mediclaim, max is 1250, minimum any amount. (deduction for months in a year)
(6) Holiday Allowances as per the holidays allowed in FORM V
Does the percentage differ from company to company or is it the same as per the government law? Am I correct, or are there any mistakes in the above? Please correct me if I have gone wrong in any place.
Thanks and Regards,
Sriram V B
From India, Madras
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Hi Everyone Can you please help me, i am working in a staffing company and looking for a salary structure where i can divide more on incentive based. Can you please help. Thanks
From India, New Delhi
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From India, New Delhi
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can any one tell me whether both DA & HRA can be incorporated in the salary stucture ? If yes then what max % is allowed, if no then let me know the exact way to bifurcate both.. Regards Sangeeta
From India, New Delhi
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From India, New Delhi
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Hi Sriram,
As you requested, please find below the salary breakup:
Basic: 30% - 50% of CTC (Cost to Company)
HRA:
- 50% of Basic for Major Cities (i.e., Chennai, Delhi, Mumbai, & Kolkata)
- 40% of Basic for all other locations
Dearness Allowances (D.A): Most companies will not provide this, as it is government-allocated and fully taxable.
Transport Allowance: Up to Rs. 800 per month is non-taxable.
Telephone Allowance: Fully taxable
Deputation Allowance: Fully taxable
Provident Fund: 12% of Basic
Gratuity: 4.8% of Basic (Employees who have worked in an organization for a minimum of 5 years are eligible for this)
Hope the above details clarify some of your doubts.
Best Regards,
Isaac Patturaja
9444637384
From India, Madras
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As you requested, please find below the salary breakup:
Basic: 30% - 50% of CTC (Cost to Company)
HRA:
- 50% of Basic for Major Cities (i.e., Chennai, Delhi, Mumbai, & Kolkata)
- 40% of Basic for all other locations
Dearness Allowances (D.A): Most companies will not provide this, as it is government-allocated and fully taxable.
Transport Allowance: Up to Rs. 800 per month is non-taxable.
Telephone Allowance: Fully taxable
Deputation Allowance: Fully taxable
Provident Fund: 12% of Basic
Gratuity: 4.8% of Basic (Employees who have worked in an organization for a minimum of 5 years are eligible for this)
Hope the above details clarify some of your doubts.
Best Regards,
Isaac Patturaja
9444637384
From India, Madras
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Dear Friends,
Might it be helpful to you all.
Please Note:
1.) For every cash component paid to an employee, the employer has to bear FBT cost.
2.) Any kind of reimbursement should be part of CTC.
3.) Some companies also include performance pay bonus as part of CTC.
For any details, you can email me.
Regards,
Nikhil Kumar
From India, Delhi
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Might it be helpful to you all.
Please Note:
1.) For every cash component paid to an employee, the employer has to bear FBT cost.
2.) Any kind of reimbursement should be part of CTC.
3.) Some companies also include performance pay bonus as part of CTC.
For any details, you can email me.
Regards,
Nikhil Kumar
From India, Delhi
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Hi Sriram,
First thing you should understand is that there is no fixed pattern of salary; it changes from company to company.
The illustration given by Geetanjali is one way of fixing up a salary structure.
One common way followed in organizations is:
Basic Pay: There is a scale for basic pay as per level/designation, say Rs.X
Dearness Allowance: Normally seen in the salary structure of Govt Organizations. It is calculated based on the Consumer Price Index
HRA: It depends on Basic Pay, varying from 20-50% of basic pay
CCA: Another component, rarely seen, depends on company policy
Conveyance/Transport Allowance: Varies, allowance up to Rs. 800 per month is tax-exempt
Medical: Normally Rs. 1250 per month, or some companies provide Rs. 15,000 yearly, which is tax-exempt. Reimbursement on proof is possible
Special Allowance: Sometimes used to match the CTC with a negotiated figure, adjusted if not possible due to restrictions like the basic pay limit for a given designation. It can be named under any allowance like Professional Support Allowance/Development Allowance, etc.
Deductions:
PF: 12% of basic
Gratuity: 4.81% of basic
Superannuation, etc.
So when you say:
(1) Basic Pay - 2500 and above, HRA will be taken into account
(2) Basic Pay - < 2500, DA will be taken into account.
It's entirely company policy, and you need to understand it from your company person.
Salary structure may change from Management to Management as the percentage of some allowances may change according to level. For example, if there is an allowance called Mobile Bill reimbursement, it may vary.
Renu
When you design a CTC structure that is incentive-based, some percentage of CTC is kept as a performance-based incentive. The percentage of this incentive increases as the level is increased.
- At entry level/junior level, the incentive is 10-15% of CTC
- Middle level: 20-30% of CTC
- Senior level: 20-45% of CTC
- For President/COO/CEO/MD level, the incentive can be as high as 50-60% of CTC
There can be different types of incentives:
- Individual performance
- Group Performance
- Company performance
Some formula may be worked out to decide the exact calculation.
Sangeeta
Both DA and HRA can be part of Salary as their functionality is different, and they are not interrelated. So refer to my earlier comments.
Calculation of DA
There will be something called the Base CPI taken at a reference point, and there will be the current average CPI at a given quarter.
DA is a percentage of Basic salary, and this percentage is calculated as:
DA% = % increase over the base CPI
For example:
Current Avg CPI is 3150
Base CPI is 1708
Then % increase is 84.4%
So DA will be 84.4% of basic pay.
Regards,
Sushil Patil
From India, Mumbai
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First thing you should understand is that there is no fixed pattern of salary; it changes from company to company.
The illustration given by Geetanjali is one way of fixing up a salary structure.
One common way followed in organizations is:
Basic Pay: There is a scale for basic pay as per level/designation, say Rs.X
Dearness Allowance: Normally seen in the salary structure of Govt Organizations. It is calculated based on the Consumer Price Index
HRA: It depends on Basic Pay, varying from 20-50% of basic pay
CCA: Another component, rarely seen, depends on company policy
Conveyance/Transport Allowance: Varies, allowance up to Rs. 800 per month is tax-exempt
Medical: Normally Rs. 1250 per month, or some companies provide Rs. 15,000 yearly, which is tax-exempt. Reimbursement on proof is possible
Special Allowance: Sometimes used to match the CTC with a negotiated figure, adjusted if not possible due to restrictions like the basic pay limit for a given designation. It can be named under any allowance like Professional Support Allowance/Development Allowance, etc.
Deductions:
PF: 12% of basic
Gratuity: 4.81% of basic
Superannuation, etc.
So when you say:
(1) Basic Pay - 2500 and above, HRA will be taken into account
(2) Basic Pay - < 2500, DA will be taken into account.
It's entirely company policy, and you need to understand it from your company person.
Salary structure may change from Management to Management as the percentage of some allowances may change according to level. For example, if there is an allowance called Mobile Bill reimbursement, it may vary.
Renu
When you design a CTC structure that is incentive-based, some percentage of CTC is kept as a performance-based incentive. The percentage of this incentive increases as the level is increased.
- At entry level/junior level, the incentive is 10-15% of CTC
- Middle level: 20-30% of CTC
- Senior level: 20-45% of CTC
- For President/COO/CEO/MD level, the incentive can be as high as 50-60% of CTC
There can be different types of incentives:
- Individual performance
- Group Performance
- Company performance
Some formula may be worked out to decide the exact calculation.
Sangeeta
Both DA and HRA can be part of Salary as their functionality is different, and they are not interrelated. So refer to my earlier comments.
Calculation of DA
There will be something called the Base CPI taken at a reference point, and there will be the current average CPI at a given quarter.
DA is a percentage of Basic salary, and this percentage is calculated as:
DA% = % increase over the base CPI
For example:
Current Avg CPI is 3150
Base CPI is 1708
Then % increase is 84.4%
So DA will be 84.4% of basic pay.
Regards,
Sushil Patil
From India, Mumbai
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Thanks for the info friends. I’ve a doubt. Is there any legislation(s) regarding the salary break up % other than the Minimum wages? Pls Let me Know. Thank you. Kumanan. A
From India, Madras
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From India, Madras
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I am giving salary structure details as per my knowledge and industry practice.
1) Your basic is not less than the minimum basic fixed by the Government.
2) If there is a worker, then you have to pay DA with basic.
3) Generally, it depends on company policy, but the standard practice is to keep basic at 40-60 percent of CTC.
4) As per government rules, you have to pay a minimum HRA of 5% on basic and DA.
5) Other allowances can be fixed as per your requirements but not more than the basic for a good visual look. Generally, it is assumed that a higher basic means a good company.
Thanks,
Pankaj
From India, Mumbai
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1) Your basic is not less than the minimum basic fixed by the Government.
2) If there is a worker, then you have to pay DA with basic.
3) Generally, it depends on company policy, but the standard practice is to keep basic at 40-60 percent of CTC.
4) As per government rules, you have to pay a minimum HRA of 5% on basic and DA.
5) Other allowances can be fixed as per your requirements but not more than the basic for a good visual look. Generally, it is assumed that a higher basic means a good company.
Thanks,
Pankaj
From India, Mumbai
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Hi Sangeeta,
DA and HRA can be incorporated in salary structure. HRA will be 40% of Basic. DA (Dearness Allowance - Some companies use "Duty Allowance"; both are treated differently). If it is "Dearness Allowance," then as per Government regulations, a percentage on Basic will be applied. If it is "Duty Allowance," then based on the number of days the employee is present in a month, it may be Rs.100 for a month, varying from organization to organization.
Regards,
Sujit
From India, Pune
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DA and HRA can be incorporated in salary structure. HRA will be 40% of Basic. DA (Dearness Allowance - Some companies use "Duty Allowance"; both are treated differently). If it is "Dearness Allowance," then as per Government regulations, a percentage on Basic will be applied. If it is "Duty Allowance," then based on the number of days the employee is present in a month, it may be Rs.100 for a month, varying from organization to organization.
Regards,
Sujit
From India, Pune
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Dear all,
Hi,
Please, can anyone help me with information about management trainee benefits, compensation, and the requirements (documents & permissions) for a company in the service industry?
Thank you,
Sunil Kumar
9210789705
From Netherlands
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Hi,
Please, can anyone help me with information about management trainee benefits, compensation, and the requirements (documents & permissions) for a company in the service industry?
Thank you,
Sunil Kumar
9210789705
From Netherlands
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hi this Saradhi Can u please clear me that bonus includes in CTC, and also clear me about main components of CTC Saradhi
From India, Hyderabad
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From India, Hyderabad
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Thanx to all. I guess thr is an ammendment that the basic salary has to be within 40%-65% of the Gross salary...can n e 1 throw some light on this?? Regards Sangeeta
From India, New Delhi
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From India, New Delhi
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Friend,
As per Minimum Wages Basic + DA + HRA + Other Allowances (Without PF & other Reimbursement), it should be of the Minimum Wages act. Rest for other employees, as such, there is no rule. It should be as per Company Rule.
Regards,
Nikhil
From India, Delhi
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As per Minimum Wages Basic + DA + HRA + Other Allowances (Without PF & other Reimbursement), it should be of the Minimum Wages act. Rest for other employees, as such, there is no rule. It should be as per Company Rule.
Regards,
Nikhil
From India, Delhi
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can n e one tell me whether the Bonus (not performance bonus) can be given monthly in gross salary ?? if yes do we have to deduct esi from the bonus ? Pls help.... Sangeeta
From India, New Delhi
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From India, New Delhi
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What would be the best salary structure for saving of Income Tax, with a Gross Salary of Rs.9.00 per annum. Can include Petrol or Car Maintenance or any other tax saving incentives.
From India, Mumbai
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From India, Mumbai
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Please provide me with an Excel sheet where earnings and deductions are shown separately. On the earnings side, include Basic Pay, DA, HRA, and CCA. On the deductions side, include PF, Gratuity, and other deductions like medical facility. If there are any incentives entered, they should add to the earnings column. Additionally, a 10% TDS needs to be deducted, and the final salary should be calculated.
Kindly send this to kartheek.kn@gmail.com.
Thank you.
Kartheek K N
From India, Bangalore
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Kindly send this to kartheek.kn@gmail.com.
Thank you.
Kartheek K N
From India, Bangalore
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Hi Akumman,
There is no legislation for salary break-up, but one has to follow the upper limit caps for HRA, conveyance, and medical reimbursement. For example, HRA - as per IT law, one can opt for only up to 40% of the basic salary in non-metro cities and 50% in metro cities.
Additionally, there is a limit of Rs. 800 per month for conveyance and Rs. 1250 for medical reimbursements. The remaining components depend on the management's decisions and are subject to company policy standards, norms, and industry practices.
Thank you,
Geetanjali
From India, Pune
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There is no legislation for salary break-up, but one has to follow the upper limit caps for HRA, conveyance, and medical reimbursement. For example, HRA - as per IT law, one can opt for only up to 40% of the basic salary in non-metro cities and 50% in metro cities.
Additionally, there is a limit of Rs. 800 per month for conveyance and Rs. 1250 for medical reimbursements. The remaining components depend on the management's decisions and are subject to company policy standards, norms, and industry practices.
Thank you,
Geetanjali
From India, Pune
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Greetings,
I just want to know, when DA is compulsory from the government side, then why are mostly companies not providing it? Even if some do provide it, they are not following the figures given by the government.
Regards,
Vikas
09590461568
From India, Bangalore
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I just want to know, when DA is compulsory from the government side, then why are mostly companies not providing it? Even if some do provide it, they are not following the figures given by the government.
Regards,
Vikas
09590461568
From India, Bangalore
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I have a query. Because I am a fresher, I have been assigned to create a salary slip for an employee who joined the company late, on the 8th of the month. How can I deduct his 7-day salary or how can I show it on the salary slip?
Thank you.
From India, Mumbai
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Thank you.
From India, Mumbai
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Take basic+DA as 60% of CTC. HRA can range from 5% to 60% of CTC depending on the town. Conveyance allowance is fixed up to 1600. Special allowance can be considered as city compensatory allowance, and the remaining amount can be divided into City compensatory and other allowances such as dressing, mobile, or washing, etc.
In certain industries, the special allowance is fixed. When calculating, you can simply divide the salary by 30 and multiply it by the number of days.
From India, Mumbai
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In certain industries, the special allowance is fixed. When calculating, you can simply divide the salary by 30 and multiply it by the number of days.
From India, Mumbai
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Hi,
Can anyone know about the preset percentage of PF? All companies have started different deductions in salaries. Everyone is saying that as per the new rule of 2016, PF deductions have increased. Now, I am totally confused. Please help me. Below, I mentioned my colleague's salary numbers for reference. His gross is 21000, and the breakdown is as follows: Basic 20%, HRA 20%, Conveyance 10%, LTA 10%, Medical 10%, Others 10%, and FBP 20%. The deduction part includes PF, gratuity, and meal coupons (although he is not registered in meal coupons). The PF percentage is 12%, but I am not sure if it has changed. He is currently getting 17789, with 3000 deducted from his gross. Is this correct? Please help me.
Thanks,
venkateshhrm@yahoo.in
7207442648
From India, Hyderabad
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Can anyone know about the preset percentage of PF? All companies have started different deductions in salaries. Everyone is saying that as per the new rule of 2016, PF deductions have increased. Now, I am totally confused. Please help me. Below, I mentioned my colleague's salary numbers for reference. His gross is 21000, and the breakdown is as follows: Basic 20%, HRA 20%, Conveyance 10%, LTA 10%, Medical 10%, Others 10%, and FBP 20%. The deduction part includes PF, gratuity, and meal coupons (although he is not registered in meal coupons). The PF percentage is 12%, but I am not sure if it has changed. He is currently getting 17789, with 3000 deducted from his gross. Is this correct? Please help me.
Thanks,
venkateshhrm@yahoo.in
7207442648
From India, Hyderabad
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Dear Mr. Venkatesh,
Please note PF deductions of Basic + CA = 12%. For example, a person's salary is 15000/- and his working days are 30. His breakdown is as follows:
- Basic = 10500
- HRA = 3000
- CA = 1500
PF Deduction = Basic + CA = 12000. The PF deduction is 1440/-.
I hope I have made myself clear. If there are any changes, please let me know.
Best Regards,
Ambika
From India, undefined
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Please note PF deductions of Basic + CA = 12%. For example, a person's salary is 15000/- and his working days are 30. His breakdown is as follows:
- Basic = 10500
- HRA = 3000
- CA = 1500
PF Deduction = Basic + CA = 12000. The PF deduction is 1440/-.
I hope I have made myself clear. If there are any changes, please let me know.
Best Regards,
Ambika
From India, undefined
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Hi - Can any one guide me salary structured as per minumum wages for year 2016-17. Thanks...Sunil Patil
From India, Andheri
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From India, Andheri
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I want to know minimum wages of person working in shops & establishments in tamil nadu. I will be thankful if you provide me classification of zones as well. Thanks..Sunil Patil
From India, Andheri
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From India, Andheri
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Dear Principles, Kindly any one share the salary break format for the Mobile showroom manager at tamil nadu minimum wager act. For your kind information.. Regarding, Danish
From India, Chennai
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From India, Chennai
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Dear Sir,
Details are as follows:
Basic: 40% for non-metro cities, 50% for metro cities.
HRA: 50% of Basic for metro cities like Delhi, Mumbai, Kolkata, and Chennai, and 40% of CTC for other cities.
Medical Allowance: ₹1250/- tax exemption.
Transport Allowance: Up to ₹800/- per month is not taxable.
Provident Fund: 12% of basic for both employee and employer.
Gratuity: 4.8% of Basic (Employees who have worked in an organization for a minimum of 5 years are eligible for the same).
From India, Ahmedabad
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Details are as follows:
Basic: 40% for non-metro cities, 50% for metro cities.
HRA: 50% of Basic for metro cities like Delhi, Mumbai, Kolkata, and Chennai, and 40% of CTC for other cities.
Medical Allowance: ₹1250/- tax exemption.
Transport Allowance: Up to ₹800/- per month is not taxable.
Provident Fund: 12% of basic for both employee and employer.
Gratuity: 4.8% of Basic (Employees who have worked in an organization for a minimum of 5 years are eligible for the same).
From India, Ahmedabad
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Salary structure CTC 15000.xlsx
Typical salary breakup.jpg