Hi,
We are in the process of restructuring salaries for some of our senior executives. Could someone please share the details of the CTC breakup being practiced at your organization? The details required include the different heads and the percentage of total emoluments against which it is apportioned.
Thanks and looking forward to your response.
Khullam
From India, Bangalore
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We are in the process of restructuring salaries for some of our senior executives. Could someone please share the details of the CTC breakup being practiced at your organization? The details required include the different heads and the percentage of total emoluments against which it is apportioned.
Thanks and looking forward to your response.
Khullam
From India, Bangalore
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Hi!
I recommend undergoing a comprehensive Executive Compensation Review and designing a new Salary Structure. Simply breaking up a structure based on how others implemented a system designed for them may not work best for your organization. Compensation consultants like us look at the whole picture and would design one that takes into consideration the impact of such an executive compensation system on the rank and file salary and benefits structure.
It's quite rare to see two distinct salary structures and benefits within an organization. The usual practice is to show the "pay line" pattern from rank and file to the executive level, so the board and the shareholders can easily see the real picture of how their organization's compensation and benefits are being implemented and managed.
Get in touch if you need real help.
Best wishes.
Ed Llarena, Jr.
Managing Partner
Emilla Consulting
From Philippines, Parañaque
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95I recommend undergoing a comprehensive Executive Compensation Review and designing a new Salary Structure. Simply breaking up a structure based on how others implemented a system designed for them may not work best for your organization. Compensation consultants like us look at the whole picture and would design one that takes into consideration the impact of such an executive compensation system on the rank and file salary and benefits structure.
It's quite rare to see two distinct salary structures and benefits within an organization. The usual practice is to show the "pay line" pattern from rank and file to the executive level, so the board and the shareholders can easily see the real picture of how their organization's compensation and benefits are being implemented and managed.
Get in touch if you need real help.
Best wishes.
Ed Llarena, Jr.
Managing Partner
Emilla Consulting
From Philippines, Parañaque
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CTC can be broken down into Basic Salary, Uniform Maintenance Allowance, Conveyance Reimbursement, Servant, Professional Development, Education, Driver, Company-Owned Car, Superannuation, PF, Gratuity, HRA, and Soft Furnishing.
Please review the corrected version above.
From India, Delhi
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Please review the corrected version above.
From India, Delhi
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Hi Khullam,
It's my pleasure to answer some of your queries:
Q. We are in the process of restructuring salaries for some of our senior executives. Can someone share the details of the CTC breakup being practiced at your organization?
A. Restructuring salaries is a major exercise, especially for Senior Management as they fall into the Higher Tax Bracket. First, determine the basic philosophy or premise for this exercise and the desired outcome. If it is for tax savings, then there would be a different approach, or if it is to match industry standards, then it is a different exercise.
For instance, if the premise is tax savings, then include Professional Development Allowance & Car lease, etc.
Q. Details required are the different heads and the percentage of total emoluments against which it is apportioned.
A.
Monthly -
Basic salary - depends on the structure of your organization.
HRA - It is 50% of the Basic salary in 4 metro cities and 40% in other towns.
Conveyance allowance - Rs 9600/ p.a.
Annuals -
Medical Reimbursement - Rs 15,000/- p.a.
LTA - varies from company to company, usually the same as the basic or two times the basic amount.
PDA - Use it to balance the total.
Petrol Reimbursement - A fair amount based on the person's consumption.
Car lease - A fair amount applicable in your city with due consideration of Arm's length Transaction.
Hope this helps you to some extent.
Regards,
Rajat Joshi
From India, Pune
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It's my pleasure to answer some of your queries:
Q. We are in the process of restructuring salaries for some of our senior executives. Can someone share the details of the CTC breakup being practiced at your organization?
A. Restructuring salaries is a major exercise, especially for Senior Management as they fall into the Higher Tax Bracket. First, determine the basic philosophy or premise for this exercise and the desired outcome. If it is for tax savings, then there would be a different approach, or if it is to match industry standards, then it is a different exercise.
For instance, if the premise is tax savings, then include Professional Development Allowance & Car lease, etc.
Q. Details required are the different heads and the percentage of total emoluments against which it is apportioned.
A.
Monthly -
Basic salary - depends on the structure of your organization.
HRA - It is 50% of the Basic salary in 4 metro cities and 40% in other towns.
Conveyance allowance - Rs 9600/ p.a.
Annuals -
Medical Reimbursement - Rs 15,000/- p.a.
LTA - varies from company to company, usually the same as the basic or two times the basic amount.
PDA - Use it to balance the total.
Petrol Reimbursement - A fair amount based on the person's consumption.
Car lease - A fair amount applicable in your city with due consideration of Arm's length Transaction.
Hope this helps you to some extent.
Regards,
Rajat Joshi
From India, Pune
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Thank you, Rajat, for your inputs.
Basically, it is a tax-saving initiative. We are looking for the apportionment of the CTC into different heads. Nowadays, I understand there are quite a few 'baskets of allowances', etc., from which an employee can choose - just need to understand things followed by someone else.
Regards,
khullam
From India, Bangalore
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Basically, it is a tax-saving initiative. We are looking for the apportionment of the CTC into different heads. Nowadays, I understand there are quite a few 'baskets of allowances', etc., from which an employee can choose - just need to understand things followed by someone else.
Regards,
khullam
From India, Bangalore
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Hi Khullam,
Welcome!
I suggest that you seek the help of a local Chartered Accountant in structuring the break-ups, especially those pertaining to tax savings schemes, as they usually come under the scrutiny of tax authorities.
Cheerio,
Rajat
From India, Pune
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Welcome!
I suggest that you seek the help of a local Chartered Accountant in structuring the break-ups, especially those pertaining to tax savings schemes, as they usually come under the scrutiny of tax authorities.
Cheerio,
Rajat
From India, Pune
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Salary structure CTC 15000.xlsx
Typical salary breakup.jpg