Hello, I am working in a company where, till now, we had a flat salary structure, i.e., Basic was fixed, and we had Net take-home as salary. Now, the company has changed to a CTC structure. During Increment time, we are informed that your Increment would be your Gross Salary. This means if my Current Salary is 20000 PM and I receive a hike of 3000, it would be 23000 Gross, from which PF, Monthly Bonus, and if ESIC is applicable, that would also be deducted from the same.
Please help me understand what we should do in this case. How can the take-home pay automatically turn into Gross?
Regards,
Lata
From India, Ahmedabad
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Please help me understand what we should do in this case. How can the take-home pay automatically turn into Gross?
Regards,
Lata
From India, Ahmedabad
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Hello there,
Can you clarify the deduction that occurred before your appraisal time? Generally, CTC includes both deductions and earnings along with other benefits (including the employer's part). Gross pay comprises the employee's share of PF, ESI, and PT.
Therefore, based on your previous query, gross pay does not represent your take-home pay. I recommend discussing this further with your immediate reporting authority or HR personnel.
Regards,
Nijanthan C
From India, Chennai
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3Can you clarify the deduction that occurred before your appraisal time? Generally, CTC includes both deductions and earnings along with other benefits (including the employer's part). Gross pay comprises the employee's share of PF, ESI, and PT.
Therefore, based on your previous query, gross pay does not represent your take-home pay. I recommend discussing this further with your immediate reporting authority or HR personnel.
Regards,
Nijanthan C
From India, Chennai
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There are no legal constraints on how much salary is to be paid (more than minimum wages) or on the components and the increments that a person will receive. Therefore, it is the decision of the management as to how much increment they will give and what components they will include in their salary. In general, however, no company will give an increment in a manner that reduces the amount of salary the person takes home. If you have concerns about the revised structure, you should talk to the HR or the owner of the company and get your point across.
From India, Mumbai
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From India, Mumbai
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Hello Saswata,
Currently, I am taking home less than before. Previously, my salary used to be 20,000 with a flat take-home pay, with only deductions of Rs. 500 for Mobile Bill and Rs. 200 for Professional Tax. However, I have not yet received my deduction details, but the salary I received was around 18,200.
Hello Nijanthan,
Yes, I am aware of the Net Pay/Gross/CTC structures. As mentioned earlier, previously there were only two deductions for Mobile and PT. However, suddenly they have changed the structure and now our Net Pay is equivalent to Gross.
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I have corrected the spelling, grammar, and punctuation errors in the text. I have also ensured proper paragraph formatting with a single line break between paragraphs. The original meaning and tone of the message have been preserved.
From India, Ahmedabad
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Currently, I am taking home less than before. Previously, my salary used to be 20,000 with a flat take-home pay, with only deductions of Rs. 500 for Mobile Bill and Rs. 200 for Professional Tax. However, I have not yet received my deduction details, but the salary I received was around 18,200.
Hello Nijanthan,
Yes, I am aware of the Net Pay/Gross/CTC structures. As mentioned earlier, previously there were only two deductions for Mobile and PT. However, suddenly they have changed the structure and now our Net Pay is equivalent to Gross.
---
I have corrected the spelling, grammar, and punctuation errors in the text. I have also ensured proper paragraph formatting with a single line break between paragraphs. The original meaning and tone of the message have been preserved.
From India, Ahmedabad
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You need give us the details of the payslip The gross can not come down though the net / takehome can reduce on account of valid and legal deductions that were not there before
From India, Mumbai
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From India, Mumbai
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What we can presume is your Gross salary is 20K + 3K hike, i.e., Rs. 23,000/-
Less: Deductions:
- PF 12% on Rs. 15,000/- is Employee's Contribution: Rs. 1,800
- PF Employer's Contribution 12+0.65+0.50% = 13.15%: Rs. 1,973
- Professional Tax: Rs. 200
- Mobile: Rs. 300
- Bonus Rs. 7,000/12 = Rs. 583/- per month: Rs. 583
Total Deduction: Rs. 4,856
Net amount Payable (Rs. 23,000 - 4,856) = Rs. 18,144
Your company must have calculated your salary in the above manner. However, you can inform them to maintain your existing take-home salary and request them not to deduct the employer's PF contribution from your increased salary. Also, inform them that the Bonus is payable annually and based on the Company's profitability, thus should not be considered as part of your salary.
If they do not accept the above, tell them not to deduct any PF amount from your salary. Open a recurring account and deposit the amount of Rs. 2,000/- which your company is deducting as the employer's share to PF.
Suresh
From India, Thane
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Less: Deductions:
- PF 12% on Rs. 15,000/- is Employee's Contribution: Rs. 1,800
- PF Employer's Contribution 12+0.65+0.50% = 13.15%: Rs. 1,973
- Professional Tax: Rs. 200
- Mobile: Rs. 300
- Bonus Rs. 7,000/12 = Rs. 583/- per month: Rs. 583
Total Deduction: Rs. 4,856
Net amount Payable (Rs. 23,000 - 4,856) = Rs. 18,144
Your company must have calculated your salary in the above manner. However, you can inform them to maintain your existing take-home salary and request them not to deduct the employer's PF contribution from your increased salary. Also, inform them that the Bonus is payable annually and based on the Company's profitability, thus should not be considered as part of your salary.
If they do not accept the above, tell them not to deduct any PF amount from your salary. Open a recurring account and deposit the amount of Rs. 2,000/- which your company is deducting as the employer's share to PF.
Suresh
From India, Thane
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If the work done by Suresh is correct, then it's illegal.
First, an employer's share of PF cannot be deducted from the salary.
Secondly, it is illegal to reduce an employee's salary to cover the employer's contribution to PF. Both of these points are clearly stated in the act and rules.
From India, Mumbai
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First, an employer's share of PF cannot be deducted from the salary.
Secondly, it is illegal to reduce an employee's salary to cover the employer's contribution to PF. Both of these points are clearly stated in the act and rules.
From India, Mumbai
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Lata,
From your submission, it appears that you are aware of Net Pay, Gross, and CTC. If I explain the three items: Net Pay is Take-home, Gross is monthly gross, and CTC is Cost to the Company. According to Suresh's calculation, Gross Pay and CTC have been considered as the same. If your gross pay is 23000/-, then your CTC will be more. The deductions from Gross Pay will include Mobile, PTAX, and Employee's contribution of PF only (no ESIC as your monthly gross is more than 21k). Obviously, your monthly net salary (take-home) will be more than 18200/- as you have mentioned. Your CTC will be Monthly gross x 12 + annual statutory Bonus + Employer's contribution of PF + Gratuity cost + any other cost as per your company's policy.
However, if your CTC is 23000/- after an increment, then your monthly gross will be less than 23000/-, and your take-home (net salary) will be determined after the deduction of Employee's PF contribution + possibly ESIC employee's contribution (if the monthly gross is less than 21k) + Mobile + PTax.
The actual calculation will depend on your Basic salary and the consideration of 23k after an increase as CTC or Monthly Gross. I am from Kolkata, WB.
Thanks & Regards,
S K Bandyopadhyay
USD HR Solutions
+9198310 81531
From India, New Delhi
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From your submission, it appears that you are aware of Net Pay, Gross, and CTC. If I explain the three items: Net Pay is Take-home, Gross is monthly gross, and CTC is Cost to the Company. According to Suresh's calculation, Gross Pay and CTC have been considered as the same. If your gross pay is 23000/-, then your CTC will be more. The deductions from Gross Pay will include Mobile, PTAX, and Employee's contribution of PF only (no ESIC as your monthly gross is more than 21k). Obviously, your monthly net salary (take-home) will be more than 18200/- as you have mentioned. Your CTC will be Monthly gross x 12 + annual statutory Bonus + Employer's contribution of PF + Gratuity cost + any other cost as per your company's policy.
However, if your CTC is 23000/- after an increment, then your monthly gross will be less than 23000/-, and your take-home (net salary) will be determined after the deduction of Employee's PF contribution + possibly ESIC employee's contribution (if the monthly gross is less than 21k) + Mobile + PTax.
The actual calculation will depend on your Basic salary and the consideration of 23k after an increase as CTC or Monthly Gross. I am from Kolkata, WB.
Thanks & Regards,
S K Bandyopadhyay
USD HR Solutions
+9198310 81531
From India, New Delhi
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