Dear HR Members
I want to know that how is break-up of CTC done. for eg: CTC is 100,000/- and wat will be the Basic.. is there any formula for that..?
and if we have (Baic+HRA+Conv+LTA+Med) as a salary head and if we dont want to put the employees per month increment into basic. can we add one more extra salary head.
while adding new salary heading wat points should be taken into the consideration..
Please reply
Sunil
From India, Mumbai
2I want to know that how is break-up of CTC done. for eg: CTC is 100,000/- and wat will be the Basic.. is there any formula for that..?
and if we have (Baic+HRA+Conv+LTA+Med) as a salary head and if we dont want to put the employees per month increment into basic. can we add one more extra salary head.
while adding new salary heading wat points should be taken into the consideration..
Please reply
Sunil
From India, Mumbai
Hi
There is no specific rule for doing a salary break up. It can be specific to your company policy. There are only some guidelines from 'good HR practice'.
1. Keep Basic pay as high as possible and higher than 6500/- per month if possible.
2. Keep 'HRA' less than or equal to 50% of Basic pay. Higher than 50% does not give any tax benefit to employee and it is better to put excess amount into Basic as it will increase retirement benfits to the employee. Keeping a HRA lower than 40% also reduces tax benefits available. In absolute terms, an HRA amount of higher than Rs.25,000/- per month is also not advisable unless the concerned individual has a documented house rent lease agreement. Offcourse, if other salary heads available are limited, HRA becomes a parking lot.
3. As far as possible, keep gross monthly salary of an employee higher than Rs.10,000.00 unless the company is already registered under ESI benefits.
Given the above, a CTC of 100,000.00 can be broken up into -
Basic of 50,000.00
HRA of 20,000.00
Conveyance Allowance of 9,600.00
Medical 5,000.00
LTA 5,000.00
Meal Coupons 10400
Hope this helps.
From United States, Iowa City
There is no specific rule for doing a salary break up. It can be specific to your company policy. There are only some guidelines from 'good HR practice'.
1. Keep Basic pay as high as possible and higher than 6500/- per month if possible.
2. Keep 'HRA' less than or equal to 50% of Basic pay. Higher than 50% does not give any tax benefit to employee and it is better to put excess amount into Basic as it will increase retirement benfits to the employee. Keeping a HRA lower than 40% also reduces tax benefits available. In absolute terms, an HRA amount of higher than Rs.25,000/- per month is also not advisable unless the concerned individual has a documented house rent lease agreement. Offcourse, if other salary heads available are limited, HRA becomes a parking lot.
3. As far as possible, keep gross monthly salary of an employee higher than Rs.10,000.00 unless the company is already registered under ESI benefits.
Given the above, a CTC of 100,000.00 can be broken up into -
Basic of 50,000.00
HRA of 20,000.00
Conveyance Allowance of 9,600.00
Medical 5,000.00
LTA 5,000.00
Meal Coupons 10400
Hope this helps.
From United States, Iowa City
Hi Sunil,
The contents of the salary break up is as below, you can prepare it at the suitability of your own. HRA would be 50 or 60% of basic.
Basic
HRA
CCA - 825/- is exempted from tax
Other Allowance
Mobile Reimbursement
Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.
Getting more than this will be covered under Mediclaim or it depends on company policy
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia
Annual Total Cost = AFGC + PF+ESIC
Annual total cost is also called as CTC.
Apart from this Food coupons, Holiday package and Furnishing items are included in their CTC.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
The contents of the salary break up is as below, you can prepare it at the suitability of your own. HRA would be 50 or 60% of basic.
Basic
HRA
CCA - 825/- is exempted from tax
Other Allowance
Mobile Reimbursement
Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.
Getting more than this will be covered under Mediclaim or it depends on company policy
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia
Annual Total Cost = AFGC + PF+ESIC
Annual total cost is also called as CTC.
Apart from this Food coupons, Holiday package and Furnishing items are included in their CTC.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
CTC = BASE + CHIOCE + PLI
BASE:
BASIC + PF + GRATUITY
CHOICE PAY :
HRA/COMPANY OWNED ACCOMADATION/LEASED ACCOMADATION + CHILDREN EDUCATION ALLOWANCE + CHILDREN HOSTEL ALLOWANCE + MEDICAL REIMBURSEMENT + CONVEYANCE + FUEL & MAINTANENCE/ COMPANY OWNED VECHICLE + LTA + GIFT COUPON + FOOD COUPON + SUPERANNUATION + SPECIAL PERSONAL ALLOWANCE + HOSPITALISATION INSURANCE
PLI :
10 - 5 % OF CTC
All the components of Choice pay elements can be administered with the best policies of taxation.
Regards,
Anil.Chilukuri
From India, Madras
BASE:
BASIC + PF + GRATUITY
CHOICE PAY :
HRA/COMPANY OWNED ACCOMADATION/LEASED ACCOMADATION + CHILDREN EDUCATION ALLOWANCE + CHILDREN HOSTEL ALLOWANCE + MEDICAL REIMBURSEMENT + CONVEYANCE + FUEL & MAINTANENCE/ COMPANY OWNED VECHICLE + LTA + GIFT COUPON + FOOD COUPON + SUPERANNUATION + SPECIAL PERSONAL ALLOWANCE + HOSPITALISATION INSURANCE
PLI :
10 - 5 % OF CTC
All the components of Choice pay elements can be administered with the best policies of taxation.
Regards,
Anil.Chilukuri
From India, Madras
Dear Anil. Chilukuri,
I have given valuable information regarding ctc. I would like to ask you that if my company is providing car with driver including fuel & maint., electricity exp. and telephone exp. at home and now the company wants to convert all these things into CTC earlier the company was followed gross pay system further the company was to pay additional components.
for the calculation of ctc how it will consider in value.
Regards
Manish (
)
9721169784
From India, Lucknow
I have given valuable information regarding ctc. I would like to ask you that if my company is providing car with driver including fuel & maint., electricity exp. and telephone exp. at home and now the company wants to convert all these things into CTC earlier the company was followed gross pay system further the company was to pay additional components.
for the calculation of ctc how it will consider in value.
Regards
Manish (
9721169784
From India, Lucknow
Dear Manish,
Add the expences against the facilities provided to te employee into the choice pay.
For Ex:
If the expenditure on Car/Driver/Fuel/Maintance/Electricity/Telephone is approximately Rs.3 LPA and his ctc is Rs.6LPA, then you can fix his CTC to be approximately to Rs.9LPA.
The same is the concept what we follow during migration of an employee from Gross structure to CTC structure.
Thanks & Regards,
Anil.Ch
From India, Madras
Add the expences against the facilities provided to te employee into the choice pay.
For Ex:
If the expenditure on Car/Driver/Fuel/Maintance/Electricity/Telephone is approximately Rs.3 LPA and his ctc is Rs.6LPA, then you can fix his CTC to be approximately to Rs.9LPA.
The same is the concept what we follow during migration of an employee from Gross structure to CTC structure.
Thanks & Regards,
Anil.Ch
From India, Madras
Hi Everyone ,
Iam a fresher under the profile of Sallary & Compensation . I need the sallary breakup of 3.45 lacs per annum CTC. tHE SALLARY HEADS WE USE HERE ARE -
EARNINGS
Basic
HRA
Conveyance allowance
medical allowance
uniform allowance
Special allowance
child education
entertainment allowance
other allowances
DEDUCTIONS
EPF
ESIC
Prof.Tax
TDS
kINDLY HELP ME WITH THIS STRUCTURE TO SHOW THE BREAK UP OF 3.45 lacs perannum AS CTC.
Thanks in advance ..
pRIYANKA
From India, Ahmadabad
Iam a fresher under the profile of Sallary & Compensation . I need the sallary breakup of 3.45 lacs per annum CTC. tHE SALLARY HEADS WE USE HERE ARE -
EARNINGS
Basic
HRA
Conveyance allowance
medical allowance
uniform allowance
Special allowance
child education
entertainment allowance
other allowances
DEDUCTIONS
EPF
ESIC
Prof.Tax
TDS
kINDLY HELP ME WITH THIS STRUCTURE TO SHOW THE BREAK UP OF 3.45 lacs perannum AS CTC.
Thanks in advance ..
pRIYANKA
From India, Ahmadabad
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CTC CALCULATION SHEET.xls