Respected Seniors !!
I would like to know what are the different categories or components in designing the salary Head ...
For the purpose of calculatons viz EPF ,Gratuity calculation, Tax deduction etc .
The (Basic + DA) is also taken in to account while calculating EPF presently in my organisation ( Can it only be calculated only from Basic only excluding DA )
I want to know WHY companies mostly private companies dont have DA in their salary structure ? What is the Actual Logic behind that ?
Lastly is there any Salary Head Name which is not TAXABLE ? ( which might be benefitting to employee in saving the take home pay !
Sangita
From India, Imphal
I would like to know what are the different categories or components in designing the salary Head ...
For the purpose of calculatons viz EPF ,Gratuity calculation, Tax deduction etc .
The (Basic + DA) is also taken in to account while calculating EPF presently in my organisation ( Can it only be calculated only from Basic only excluding DA )
I want to know WHY companies mostly private companies dont have DA in their salary structure ? What is the Actual Logic behind that ?
Lastly is there any Salary Head Name which is not TAXABLE ? ( which might be benefitting to employee in saving the take home pay !
Sangita
From India, Imphal
Dear Sangita,
A.
1. Basic - 40% of the gross salary
2. HRA - 50% of basic in metro and 40% non metro
3. Conveyance - 800 fixed per mnth
4. Medical Allowance - 1250 fixed per mnth
5. LTA ((subject to company policy and entitlement) - 8.33% of Basic
6. Superannuation (Subject to company policy) - can be 3% - 6% of basic
7. PF (Subject to company policy) - 12 % of basic (employee contribution)
8. Flexible component --- its a fixed amount like driver, petrol reimbursements
B.
Gratuity calculation is as follows
Gratuity = (Basic+DA)*15/ 26 % *(No. of years
completed)
Regards,
Sarfaraz
Manager HR
Vardhman Pharma
Bangalore
From India, Bangalore
3A.
1. Basic - 40% of the gross salary
2. HRA - 50% of basic in metro and 40% non metro
3. Conveyance - 800 fixed per mnth
4. Medical Allowance - 1250 fixed per mnth
5. LTA ((subject to company policy and entitlement) - 8.33% of Basic
6. Superannuation (Subject to company policy) - can be 3% - 6% of basic
7. PF (Subject to company policy) - 12 % of basic (employee contribution)
8. Flexible component --- its a fixed amount like driver, petrol reimbursements
B.
Gratuity calculation is as follows
Gratuity = (Basic+DA)*15/ 26 % *(No. of years
completed)
Regards,
Sarfaraz
Manager HR
Vardhman Pharma
Bangalore
From India, Bangalore
Dear Sangita,
Following may be the compenent in the salary -
Basic (@40%-50%) of Gross CTC, HRA (@50%) of Basic, Transporte Allow. 800 fixed (Exempted from I.T.), LTA @ 8.33% or Max. Rs. 5000pm (Exepted if claimed every aternate year with the proof of travel), Uniform Allowance not fixed (Total Taxable), washing allowance (Taxable), Medical Reimbursement @ 8.33% of basic or max 1250pm non-taxable, Bonus@8.33% for Commercial units & 20% in factories, PF@12% of BASIC + DA (May be limited up to Rs. 6500/ as per EPF current limit) depands upon company policy.
The (Basic + DA) is also taken in to account while calculating EPF presently in my organisation ( Can it only be calculated only from Basic only excluding DA ) - NO, (DA a allowance linked with Basic & is part of BASIC applicable in Govt. Organizations, Public Sectors & organization where labour unions are active & do negotiations & generally DA revisions done in that negotiation i.e. 10% of basic, 15% of basic like that).
I want to know WHY companies mostly private companies dont have DA in their salary structure ? What is the Actual Logic behind that ? - Mostly private organizations fixed the salary in terms of CTC & negociate on gross salary (CTC) & also there is no DA is part of the salary head.
Lastly is there any Salary Head Name which is not TAXABLE ? ( which might be benefitting to employee in saving the take home pay !
All allowances are taxable & all reimbursements are non-taxable
Ajay Pal Singh
Head - HR & Admin
attribution https://www.citehr.com/465481-salary...#ixzz2YdjnGINM
From India, Delhi
Following may be the compenent in the salary -
Basic (@40%-50%) of Gross CTC, HRA (@50%) of Basic, Transporte Allow. 800 fixed (Exempted from I.T.), LTA @ 8.33% or Max. Rs. 5000pm (Exepted if claimed every aternate year with the proof of travel), Uniform Allowance not fixed (Total Taxable), washing allowance (Taxable), Medical Reimbursement @ 8.33% of basic or max 1250pm non-taxable, Bonus@8.33% for Commercial units & 20% in factories, PF@12% of BASIC + DA (May be limited up to Rs. 6500/ as per EPF current limit) depands upon company policy.
The (Basic + DA) is also taken in to account while calculating EPF presently in my organisation ( Can it only be calculated only from Basic only excluding DA ) - NO, (DA a allowance linked with Basic & is part of BASIC applicable in Govt. Organizations, Public Sectors & organization where labour unions are active & do negotiations & generally DA revisions done in that negotiation i.e. 10% of basic, 15% of basic like that).
I want to know WHY companies mostly private companies dont have DA in their salary structure ? What is the Actual Logic behind that ? - Mostly private organizations fixed the salary in terms of CTC & negociate on gross salary (CTC) & also there is no DA is part of the salary head.
Lastly is there any Salary Head Name which is not TAXABLE ? ( which might be benefitting to employee in saving the take home pay !
All allowances are taxable & all reimbursements are non-taxable
Ajay Pal Singh
Head - HR & Admin
attribution https://www.citehr.com/465481-salary...#ixzz2YdjnGINM
From India, Delhi
Thank you Mr Sarfaraz and Mr Ajay Pal Singh.. for your prompt reply.
And all Dear Seniors.. I have few more contradictions on Salry designing.. viz
As designing the Basic Salary is highly crucial in identifying the employee positions (designation) , mode of increment as accordingly to the level of his/her position, as well as EPF and Gratuity Contribution. and etc
Q1. I would like to understand "what is the Starting minimum amount of Basic" ( heard that it has to be accordingly not lesser to the residing State wages -- skill wise) ?
Q2. I have seen in my previous wok that BASIC Salary is paid lower although a fix amount is added annually on the Basic base on the employee positions (along with the usual increment).. But as indicated both by you that Usually Basic can be 40% to 50 % of the Gross CTC.. Is that a Mandatory compliance.??? ( keeping the fact that Lowering the Basic will result in less contribution from Employer)
Q3. I still want to know I want to know WHY companies mostly private companies dont have DA in their salary structure ? What is the Actual Logic behind that ?
Q4. As Gratuity payment in Pvt Ltd. companies is mandatory the same as EPF regulations , Is Payment of Gratuity through LIC premium an good option ? what are the Pros & Cons.
Q4. Heard that new Registration in Gratuity Membership stop from 1st July 2013 as per new IRDA Guidelines.Please confirm the same..
Please simplify ...
Thanking you.
From India, Imphal
And all Dear Seniors.. I have few more contradictions on Salry designing.. viz
As designing the Basic Salary is highly crucial in identifying the employee positions (designation) , mode of increment as accordingly to the level of his/her position, as well as EPF and Gratuity Contribution. and etc
Q1. I would like to understand "what is the Starting minimum amount of Basic" ( heard that it has to be accordingly not lesser to the residing State wages -- skill wise) ?
Q2. I have seen in my previous wok that BASIC Salary is paid lower although a fix amount is added annually on the Basic base on the employee positions (along with the usual increment).. But as indicated both by you that Usually Basic can be 40% to 50 % of the Gross CTC.. Is that a Mandatory compliance.??? ( keeping the fact that Lowering the Basic will result in less contribution from Employer)
Q3. I still want to know I want to know WHY companies mostly private companies dont have DA in their salary structure ? What is the Actual Logic behind that ?
Q4. As Gratuity payment in Pvt Ltd. companies is mandatory the same as EPF regulations , Is Payment of Gratuity through LIC premium an good option ? what are the Pros & Cons.
Q4. Heard that new Registration in Gratuity Membership stop from 1st July 2013 as per new IRDA Guidelines.Please confirm the same..
Please simplify ...
Thanking you.
From India, Imphal
Dear Mme
Please refer to your query on salary.
The statute is the minimum wages to be paid to employees & beyond certain number of permanent employees, the company is bound to get into PF & ESI.
As far as DA is concerned, it is a component built along with the basic for Government employees, to cover the inflation time to time, as in general the salaries of Govt. employees are lower.
In case of private companies, since globalization era, the salaries in average are pretty much higher that the need for DA & bonus have never arised.
Thanks & regards
S.Ganapathy,
Visisht Corporate Growth Associates
Management, Business & HR Consultants
VALUE INNOVATION THROUGH PEOPLE & PROCESSES
From India, Hyderabad
Please refer to your query on salary.
The statute is the minimum wages to be paid to employees & beyond certain number of permanent employees, the company is bound to get into PF & ESI.
As far as DA is concerned, it is a component built along with the basic for Government employees, to cover the inflation time to time, as in general the salaries of Govt. employees are lower.
In case of private companies, since globalization era, the salaries in average are pretty much higher that the need for DA & bonus have never arised.
Thanks & regards
S.Ganapathy,
Visisht Corporate Growth Associates
Management, Business & HR Consultants
VALUE INNOVATION THROUGH PEOPLE & PROCESSES
From India, Hyderabad
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
Salary-Note.doc
SALARY SHEET CALCULATION.xls