Hello friends,
Need ur advise to know that what is the minium percentage of basis we need to keep? As I know is minium requirement is 50% only.
I was recently join as Hr executive in retail orgnisation, where as per the guidance of our consultant we had kept 60% basic on gross which i found quite higer.
Is there any ways to reduce this percentage of basic to save cost to the company.
Pls Advice.
Regards
Madhura
From India
12Need ur advise to know that what is the minium percentage of basis we need to keep? As I know is minium requirement is 50% only.
I was recently join as Hr executive in retail orgnisation, where as per the guidance of our consultant we had kept 60% basic on gross which i found quite higer.
Is there any ways to reduce this percentage of basic to save cost to the company.
Pls Advice.
Regards
Madhura
From India
Dear Madhura,
There is no such Rule or Act which guide us to have particular % of basic rate. At the same time it is also made clear that after fixing the basic & other components you can not change unless a notice under section 9A is given under Industrial Disputes Act,1947. Why one will accept less wages.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
There is no such Rule or Act which guide us to have particular % of basic rate. At the same time it is also made clear that after fixing the basic & other components you can not change unless a notice under section 9A is given under Industrial Disputes Act,1947. Why one will accept less wages.
Regards,
R.N.Khola
(Labour Law & Legal Consultants)
09810405361
From India, Delhi
Dear Madhura,
You can do restrcuturing CTC after accepting of employee (if they are coverd under Any Labour Act viz. PF, ESIC) for geting less basic. i also do the same excerise in my previous company. for example if an employee CTC is Rs.25000/- pm then you can decide ctc as below:
Basic - Rs.7500 (30% of CTC)
HRA - Rs.3000 (40% of Basic)
Cov. - Rs.800 (Fixed)
Other Allowance - Rs.10300
LTA - Rs.625 (8.33% of Basic)
Medical - Rs.1250 (Fixed)
PF - Rs.900 (12% of Basic)
Bonus - Rs.625 (8.33% of Basic)
-----------------------------------
Total CTC - Rs.25000/-pm
----------------------------------
I hope it will clear all your query.
Regards
Vivek Vashisth
AM - HR
From India, Panipat
You can do restrcuturing CTC after accepting of employee (if they are coverd under Any Labour Act viz. PF, ESIC) for geting less basic. i also do the same excerise in my previous company. for example if an employee CTC is Rs.25000/- pm then you can decide ctc as below:
Basic - Rs.7500 (30% of CTC)
HRA - Rs.3000 (40% of Basic)
Cov. - Rs.800 (Fixed)
Other Allowance - Rs.10300
LTA - Rs.625 (8.33% of Basic)
Medical - Rs.1250 (Fixed)
PF - Rs.900 (12% of Basic)
Bonus - Rs.625 (8.33% of Basic)
-----------------------------------
Total CTC - Rs.25000/-pm
----------------------------------
I hope it will clear all your query.
Regards
Vivek Vashisth
AM - HR
From India, Panipat
Dear Madhura
Generally 50% of Gross salary is considerd as basic salary becasue of PF,Bonus, Gratuity are count on Basic. So this is liability of employer.
Basic can not be reduced. but on next increment , you may give rise in other salary head i.e. Other allow/ Special allow. So % of Basic salary reducecd definately.
Regards,
Mahesh Patel
From India, Ahmadabad
Generally 50% of Gross salary is considerd as basic salary becasue of PF,Bonus, Gratuity are count on Basic. So this is liability of employer.
Basic can not be reduced. but on next increment , you may give rise in other salary head i.e. Other allow/ Special allow. So % of Basic salary reducecd definately.
Regards,
Mahesh Patel
From India, Ahmadabad
Dear Madhura,
Basic on which once PF/ESI, as applicable, is deducted cannot be reduced. The only way left to reduce cost for the company is to 're-appoint' employees at revised terms. That is to say, you have to break the continuity of service to reduce the salary.
Higher % of basic is actually beneficial for the employees. I know some may say that higher the basic higher the taxes. But consider the higher PF contribution. Losing couple of dimes as taxes will be worth at the end of the day.
Prashant
From India, Delhi
Basic on which once PF/ESI, as applicable, is deducted cannot be reduced. The only way left to reduce cost for the company is to 're-appoint' employees at revised terms. That is to say, you have to break the continuity of service to reduce the salary.
Higher % of basic is actually beneficial for the employees. I know some may say that higher the basic higher the taxes. But consider the higher PF contribution. Losing couple of dimes as taxes will be worth at the end of the day.
Prashant
From India, Delhi
Dear Madhura,
My all friends has given their views on fixing of Basic Wages/ Salary.
It is relevant to note that LABOUR DEPARTMENT HAS NOT BEEN ABLE TO
CLEARLY SUGGEST as to what is the percentage of HRA in the total salary or
the Minimum Wages so Fixed by the State Government.
You all may be aware that the definition of WAGES under the Payment of
Minimum Wages Act READS as under:
Section 2(h)"wages" means all remuneration capable of being expressed in terms of money which would if the terms of the contract of employment express or implied were fulfilled be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance but does not include -
(i) the value of -
(a) any house accommodation, supply of light , water, medical attendance or
(b) any other amenity or any service excluded by general or special order of the appropriate government;
MEANS the above definitions clearly suggests that HRA ( House Rent Allowance) is
part of Minimum Wages but while circulating the Minimum Wages Rates, the State Government does
not specify or make it clear as to what amount of HRA includes in the total Rate of the Minimum Wages.
If the Government specify the Minimum Wages with different components of Wages which Constitutes
the Minimum Wages, the situation would be very much clear in deciding the Basic Salary in total rate of pay.
SC BHATIA
9810032863
From India, Delhi
My all friends has given their views on fixing of Basic Wages/ Salary.
It is relevant to note that LABOUR DEPARTMENT HAS NOT BEEN ABLE TO
CLEARLY SUGGEST as to what is the percentage of HRA in the total salary or
the Minimum Wages so Fixed by the State Government.
You all may be aware that the definition of WAGES under the Payment of
Minimum Wages Act READS as under:
Section 2(h)"wages" means all remuneration capable of being expressed in terms of money which would if the terms of the contract of employment express or implied were fulfilled be payable to a person employed in respect of his employment or of work done in such employment and includes house rent allowance but does not include -
(i) the value of -
(a) any house accommodation, supply of light , water, medical attendance or
(b) any other amenity or any service excluded by general or special order of the appropriate government;
MEANS the above definitions clearly suggests that HRA ( House Rent Allowance) is
part of Minimum Wages but while circulating the Minimum Wages Rates, the State Government does
not specify or make it clear as to what amount of HRA includes in the total Rate of the Minimum Wages.
If the Government specify the Minimum Wages with different components of Wages which Constitutes
the Minimum Wages, the situation would be very much clear in deciding the Basic Salary in total rate of pay.
SC BHATIA
9810032863
From India, Delhi
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