Hi Seniors,
I know this matter has been discussed many times on this site. Nevertheless, I request your help. I have recently started my professional career and am facing a problem while preparing the salaries for the staff.
My company has Basic, HRA, Medical Allowance, PF, ESI, and Special Allowance as salary components. If an employee has a CTC of 2 lakh, then what should be the structure of the employee's salary so that they have to pay the least amount of tax before investment?
Please send me the structure at ayan_bandyopadhyay@yahoo.co.in. I am relying heavily on your assistance.
Regards,
Ayan Bandyopadhyay
From India, Calcutta
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3I know this matter has been discussed many times on this site. Nevertheless, I request your help. I have recently started my professional career and am facing a problem while preparing the salaries for the staff.
My company has Basic, HRA, Medical Allowance, PF, ESI, and Special Allowance as salary components. If an employee has a CTC of 2 lakh, then what should be the structure of the employee's salary so that they have to pay the least amount of tax before investment?
Please send me the structure at ayan_bandyopadhyay@yahoo.co.in. I am relying heavily on your assistance.
Regards,
Ayan Bandyopadhyay
From India, Calcutta
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Hey ayan_bandyopadhyay, i am attaching a excel sheet to calculate ctc & all it’s components if you find any further problem do message me....
From India, Ahmadabad
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From India, Ahmadabad
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Thank you, Pratik, for the sheet. I need some additional help. How did you determine the percentages for the different salary components when a CTC of 93000 is provided? For example, how did you establish the following percentages:
- BASIC 41.80% OF CTC, 50.00% OF GROSS
- HRA 25.08% OF CTC, 30.00% OF GROSS
- MEDICAL 8.36% OF CTC, 10.00% OF GROSS
- CONVEYANCE 2.51% OF CTC, 3.00% OF GROSS
- EDUCATION ALLOWANCE 0.84% OF CTC, 1.00% OF GROSS
- SPECIAL ALLOWANCE 5.01% OF CTC, 6.00% OF GROSS
- PF 5.71% OF CTC, 100.00% GROSS
- ESI 1.99% OF CTC
- BONUS 6.96% OF CTC
- 15 DAYS PAID LEAVE 1.74% OF CTC
If CTC and your formula are provided, calculating gross and net is straightforward. However, if only CTC is given, and I must create this formula, how should I proceed? Your guidance is essential to me, as this question frequently arises in interviews. Your answer will greatly assist me in my job search.
Regards,
Ayan Bandyopadhyay
From India, Calcutta
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- BASIC 41.80% OF CTC, 50.00% OF GROSS
- HRA 25.08% OF CTC, 30.00% OF GROSS
- MEDICAL 8.36% OF CTC, 10.00% OF GROSS
- CONVEYANCE 2.51% OF CTC, 3.00% OF GROSS
- EDUCATION ALLOWANCE 0.84% OF CTC, 1.00% OF GROSS
- SPECIAL ALLOWANCE 5.01% OF CTC, 6.00% OF GROSS
- PF 5.71% OF CTC, 100.00% GROSS
- ESI 1.99% OF CTC
- BONUS 6.96% OF CTC
- 15 DAYS PAID LEAVE 1.74% OF CTC
If CTC and your formula are provided, calculating gross and net is straightforward. However, if only CTC is given, and I must create this formula, how should I proceed? Your guidance is essential to me, as this question frequently arises in interviews. Your answer will greatly assist me in my job search.
Regards,
Ayan Bandyopadhyay
From India, Calcutta
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Hi, Can anyone tell me whether the percentages(metioned in salary structure) are revised this fiscal 2013? Regards, Hasini
From India, Bangalore
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From India, Bangalore
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Dear Pratik,
I am a non-HR person who has just started my own company. As you are aware, I am required to wear many hats, and currently, I am taking on the role of an HR person. Please assist me with an Excel sheet that will calculate the Cost to Company (CTC) when I input only the take-home salary. Please bear in mind that the smaller the gap between the take-home salary and the CTC, the difference between profit and loss for me.
Thank you in advance for your prompt assistance.
From India, Chennai
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I am a non-HR person who has just started my own company. As you are aware, I am required to wear many hats, and currently, I am taking on the role of an HR person. Please assist me with an Excel sheet that will calculate the Cost to Company (CTC) when I input only the take-home salary. Please bear in mind that the smaller the gap between the take-home salary and the CTC, the difference between profit and loss for me.
Thank you in advance for your prompt assistance.
From India, Chennai
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Hi, Can any one pls help me out frm all the confusions of salary calculation ? pls provide me the easy way to learn salary calculation. Thanks & Regards Shailja Sharma
From India, Lucknow
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From India, Lucknow
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Dear Shailja,
You never gain knowledge of salary if you are going to learn any shortcut way. I am not criticizing you, but if you want to learn in the proper way, then you should buy a taxation book and read the chapter on salary. You will definitely gain knowledge of salary preparation. There are examples of all components of salary.
From India, Mumbai
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You never gain knowledge of salary if you are going to learn any shortcut way. I am not criticizing you, but if you want to learn in the proper way, then you should buy a taxation book and read the chapter on salary. You will definitely gain knowledge of salary preparation. There are examples of all components of salary.
From India, Mumbai
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Nirav, that's really okay. I appreciate your comment. But let me clear one thing, dear. It's not about shortcuts; it's about understanding the basic concept of it. How can I understand the sentences if I don't know the alphabets? That's why I specified the need for an easier way.
Thanks & Regards,
Shailja
From India, Lucknow
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Thanks & Regards,
Shailja
From India, Lucknow
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Hello, apart from sharing a few links that would give you information on compensation and salary structurization, I wish to imbibe the following information on Compensation and other benefits -
Although money isn't everything, it certainly is one of the top issues potential employees look at when considering new companies.
To make your company competitive and attractive to job candidates, you have to offer an exceptional total benefits package. That makes it a very important part of your business planning and management process if you hope to hire (and keep) top employees.
As a result, there must be many questions running in your head -
1. How do you make your benefits package attractive and competitive without financially jeopardizing the success of your business?
2. What perks can you offer that won't cost you additional money, but will mean a lot to your employees?
3. How do you set salaries?
4. What benefit costs are tax-deductible?
Forms of compensation:
1. Your incentives should be based on achievements and should include all your employees or at least the whole team.
2. Again rewards should be result-based. We cannot simply give rewards for trying. Rewards can be given only if the trial brought in a result.
3. Do not limit the amount of incentives. There should always be an open limit or at least communicate a limit higher than what is being currently achieved. This will motivate the team to push more to achieve better targets.
4. In addition to regular benefits that include health insurance / medical reimbursements, retirement plans - PF & Pension, Conveyance Allowance, etc., employees seem to be actively seeking companies that offer more of the things they value. As a result, many companies are going for a flexible salary structure wherein the employee sits with HR and according to his/her needs and convenience, gets the structure framed for himself/herself.
5. Many employees are okay with a decent pay if the company focuses on work-life balance.
Apart from this, there are a few benefits and perks that will not cost you and yet keep your employees engaged -
1) Flex time:
Allowing flexible work schedules in your business is very often the most strategic thing you can do from a hiring standpoint. Often, companies that offer flex time find their employees are more productive, motivated, and loyal.
But how do you structure it so that you don't have disgruntled employees whose jobs really can't be flexible?
One way out is to allow the employees to come up with creative ways to make their schedule flexible. Try out these solutions on a limited basis and try to measure your result. Also, make sure your employees keep your clients in mind when they devise their plans. Any plan that hinders client contact probably isn't one you want to adopt.
2) Telecommuting
Today you have to measure an employee's worth by what they produce, not by how many hours you see them sitting at their desks.
The benefits for your employees can be substantial. They can save time since their commuting will be a very brief stroll. They also benefit from a quieter and less interrupted environment. They can work whenever the inspiration hits them. Or if they have an appointment in the afternoon, they can make up the time later that night.
You too would benefit from the increased loyalty and boosted morale of your telecommuting workforce.
Further reading -
- [Ten Steps For Building A Salary Structure | International HR Forum](http://internationalhrforum.com/2010/07/29/ten-steps-for-building-a-salary-structure/)
- [Wages and Salaries | Compensation & Benefits | HR Toolkit | hrcouncil.ca](http://hrcouncil.ca/hr-toolkit/compensation-wages.cfm)
- [Salary Basics - Pay Structures | salary.com](http://www.salary.com/Small-Business-Advice/advice.asp?part=par409)
- [Best Practices for Designing Salary Structures](http://kenexa.com/Portals/0/Downloads/Best%20Practices%20for%20Designing%20Salary%20Stru ctures.pdf)
- [Salary Structure Calculator PF Deduction](https://www.citehr.com/234112-salary-structure-calculator-pf-deduction.html)
- [Salary Structure 12,000 Tax Calculator](https://www.citehr.com/291446-salary-structure-12-000-tax-calculator.html)
- [Please Guide - Salary Structure Tax Calculation](https://www.citehr.com/47732-please-guide-salary-structure-tax-calculation.html)
Hope it helped :)
From India, Mumbai
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Although money isn't everything, it certainly is one of the top issues potential employees look at when considering new companies.
To make your company competitive and attractive to job candidates, you have to offer an exceptional total benefits package. That makes it a very important part of your business planning and management process if you hope to hire (and keep) top employees.
As a result, there must be many questions running in your head -
1. How do you make your benefits package attractive and competitive without financially jeopardizing the success of your business?
2. What perks can you offer that won't cost you additional money, but will mean a lot to your employees?
3. How do you set salaries?
4. What benefit costs are tax-deductible?
Forms of compensation:
1. Your incentives should be based on achievements and should include all your employees or at least the whole team.
2. Again rewards should be result-based. We cannot simply give rewards for trying. Rewards can be given only if the trial brought in a result.
3. Do not limit the amount of incentives. There should always be an open limit or at least communicate a limit higher than what is being currently achieved. This will motivate the team to push more to achieve better targets.
4. In addition to regular benefits that include health insurance / medical reimbursements, retirement plans - PF & Pension, Conveyance Allowance, etc., employees seem to be actively seeking companies that offer more of the things they value. As a result, many companies are going for a flexible salary structure wherein the employee sits with HR and according to his/her needs and convenience, gets the structure framed for himself/herself.
5. Many employees are okay with a decent pay if the company focuses on work-life balance.
Apart from this, there are a few benefits and perks that will not cost you and yet keep your employees engaged -
1) Flex time:
Allowing flexible work schedules in your business is very often the most strategic thing you can do from a hiring standpoint. Often, companies that offer flex time find their employees are more productive, motivated, and loyal.
But how do you structure it so that you don't have disgruntled employees whose jobs really can't be flexible?
One way out is to allow the employees to come up with creative ways to make their schedule flexible. Try out these solutions on a limited basis and try to measure your result. Also, make sure your employees keep your clients in mind when they devise their plans. Any plan that hinders client contact probably isn't one you want to adopt.
2) Telecommuting
Today you have to measure an employee's worth by what they produce, not by how many hours you see them sitting at their desks.
The benefits for your employees can be substantial. They can save time since their commuting will be a very brief stroll. They also benefit from a quieter and less interrupted environment. They can work whenever the inspiration hits them. Or if they have an appointment in the afternoon, they can make up the time later that night.
You too would benefit from the increased loyalty and boosted morale of your telecommuting workforce.
Further reading -
- [Ten Steps For Building A Salary Structure | International HR Forum](http://internationalhrforum.com/2010/07/29/ten-steps-for-building-a-salary-structure/)
- [Wages and Salaries | Compensation & Benefits | HR Toolkit | hrcouncil.ca](http://hrcouncil.ca/hr-toolkit/compensation-wages.cfm)
- [Salary Basics - Pay Structures | salary.com](http://www.salary.com/Small-Business-Advice/advice.asp?part=par409)
- [Best Practices for Designing Salary Structures](http://kenexa.com/Portals/0/Downloads/Best%20Practices%20for%20Designing%20Salary%20Stru ctures.pdf)
- [Salary Structure Calculator PF Deduction](https://www.citehr.com/234112-salary-structure-calculator-pf-deduction.html)
- [Salary Structure 12,000 Tax Calculator](https://www.citehr.com/291446-salary-structure-12-000-tax-calculator.html)
- [Please Guide - Salary Structure Tax Calculation](https://www.citehr.com/47732-please-guide-salary-structure-tax-calculation.html)
Hope it helped :)
From India, Mumbai
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