Hi,
You may add the following allowance in the Gross salary of this employee.
Basic Pay
House Rent Allowance (HRA)
Conveyance/Transport/Fuel Maintenance Allowance
Children Education Allowance
Uniform Allowance
Personal Allowance
Further, I have drafted a rough CTC sheet, which you may refer for understanding.
Anything else comes to your mind, please feel free to ask,
warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)
From India, Delhi
141You may add the following allowance in the Gross salary of this employee.
Basic Pay
House Rent Allowance (HRA)
Conveyance/Transport/Fuel Maintenance Allowance
Children Education Allowance
Uniform Allowance
Personal Allowance
Further, I have drafted a rough CTC sheet, which you may refer for understanding.
Anything else comes to your mind, please feel free to ask,
warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)
From India, Delhi
Dear Sheena,
CTC/Gross salary composition varies from company to company.
It is difficult to suggest unless I know the perks and benefits you extend to yr. employees.
In general, 40% in higher and 50% in lower level of CTC goes to Basic.
51.8% of basic goes to Basic Salary linked standard perks and benefits which include - Medical allowance, LTA and retirals like PF, Gratuity and Superannuation. If HRA in your case is % of Basic then, this 51.8% will go up depending on HRA % which generally varies from 30 to 50% of Basic.
Rest you can put money in conveyance, special allowance , uniform allowance, soft furnishing and education etc.
Any amount you spend in keeping the person in service, u can put in CTC.
Devising a CTC structure based solely on Cmpany policy and agreed service condition with the concerned employee.
Pl. tell me if u require any further clarification.
With Warm Regards,
K.P.Misra
CTC/Gross salary composition varies from company to company.
It is difficult to suggest unless I know the perks and benefits you extend to yr. employees.
In general, 40% in higher and 50% in lower level of CTC goes to Basic.
51.8% of basic goes to Basic Salary linked standard perks and benefits which include - Medical allowance, LTA and retirals like PF, Gratuity and Superannuation. If HRA in your case is % of Basic then, this 51.8% will go up depending on HRA % which generally varies from 30 to 50% of Basic.
Rest you can put money in conveyance, special allowance , uniform allowance, soft furnishing and education etc.
Any amount you spend in keeping the person in service, u can put in CTC.
Devising a CTC structure based solely on Cmpany policy and agreed service condition with the concerned employee.
Pl. tell me if u require any further clarification.
With Warm Regards,
K.P.Misra
Yes
Mr. K.P. Misra I fully agrry with you. the salary structre is based on the company policy and the agreed condition with the employees.
Although normally companies have their fixed head of salary for uniformity in the record only. other wise there is no statutory compulsion for a fixed structure.
I am trying to give you the following head of salary normally practiced in the industry. and income tax friendly also.
1. Basic - (it may include DA Also) for higher salary it may be 30 - 40 % of C.T.C. and or otherwise it may be 40 to 50% of C.T.C.
2. HRA - (40 to 50% depending upon the locaton Metro or non Metro City as per Income Tax. )
3. Conveyence Allowance/ Transportation Allowance - ( Rs. 800 is exempted under Income Tax towards back and fro transportation of an empoyee and rest is taxable)
4.Child Education Allowance - (Rs. 100 per school going child max. 2 children per month is exempted under Income Tax)
4. Uniform Allowance - (It is fully taxable and a reasonable amount should be given for Washing of uniform i.e. 500 to 800)
5. Special Allowance / Management Allowance ( May be used for adjustment of balancing figure of sal. structure.
6. Books and Periodicals Allowance (Research and Professional Development Allowance RPDA) exempted if supported with Bills./ Fee of Professional Instituitons etc.
.Reimbusements a. Medical Reimbursement (Rs. 15000/- is exempted under Income Tax) b. Conveyence Reimbursement (should be supported with the bill of expenses) c. LTA (Alternate year is taxable.)
Perks: - 1. Soft furnishing allowance 2. Performance Incentives 3. Vehicle maintenance and car usage 5. Efficiency Allowance.
Hope it will give you the idea of salary strctures are in practice but it is entirely depends on the company policy and ethose.
thanks
Mohd. Arif Khan
2. HRA
Mr. K.P. Misra I fully agrry with you. the salary structre is based on the company policy and the agreed condition with the employees.
Although normally companies have their fixed head of salary for uniformity in the record only. other wise there is no statutory compulsion for a fixed structure.
I am trying to give you the following head of salary normally practiced in the industry. and income tax friendly also.
1. Basic - (it may include DA Also) for higher salary it may be 30 - 40 % of C.T.C. and or otherwise it may be 40 to 50% of C.T.C.
2. HRA - (40 to 50% depending upon the locaton Metro or non Metro City as per Income Tax. )
3. Conveyence Allowance/ Transportation Allowance - ( Rs. 800 is exempted under Income Tax towards back and fro transportation of an empoyee and rest is taxable)
4.Child Education Allowance - (Rs. 100 per school going child max. 2 children per month is exempted under Income Tax)
4. Uniform Allowance - (It is fully taxable and a reasonable amount should be given for Washing of uniform i.e. 500 to 800)
5. Special Allowance / Management Allowance ( May be used for adjustment of balancing figure of sal. structure.
6. Books and Periodicals Allowance (Research and Professional Development Allowance RPDA) exempted if supported with Bills./ Fee of Professional Instituitons etc.
.Reimbusements a. Medical Reimbursement (Rs. 15000/- is exempted under Income Tax) b. Conveyence Reimbursement (should be supported with the bill of expenses) c. LTA (Alternate year is taxable.)
Perks: - 1. Soft furnishing allowance 2. Performance Incentives 3. Vehicle maintenance and car usage 5. Efficiency Allowance.
Hope it will give you the idea of salary strctures are in practice but it is entirely depends on the company policy and ethose.
thanks
Mohd. Arif Khan
2. HRA
Hi Sheena..
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
TA
Other Allowance
Mobile Reimbursement / Month
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.
Hope now it will be very much clear to you,
And you can draw a salary structure at your own..
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
TA
Other Allowance
Mobile Reimbursement / Month
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.
Hope now it will be very much clear to you,
And you can draw a salary structure at your own..
Regards,
Amit Seth.
From India, Ahmadabad
Hi,
Every company has different grades and designations nomenclature, which defines the facilities to the employees, but the percentage of basic, hra remains same at all grades, hra may vary because it depends upon the city, if it's a metro city, it's be more than what is applicable in case of a non-metro city.
These days there is a system of giving benefit of choice pay to the employees so they may plan a particular part of the salary in order to save income tax etc, in many reputed companies, the balance part beside basic and hra is called as choice pay which may be decided by the employee itself out of some choices such as food coupons, vehicle maintenance expenses, traveling or conveyance allowance, children education allowance, hostelboarding allowance for children, leave travel allowance etc.
warm regards,
Umesh Chaudhary
(umesh.chaudhary@ril.com)
From India, Delhi
Every company has different grades and designations nomenclature, which defines the facilities to the employees, but the percentage of basic, hra remains same at all grades, hra may vary because it depends upon the city, if it's a metro city, it's be more than what is applicable in case of a non-metro city.
These days there is a system of giving benefit of choice pay to the employees so they may plan a particular part of the salary in order to save income tax etc, in many reputed companies, the balance part beside basic and hra is called as choice pay which may be decided by the employee itself out of some choices such as food coupons, vehicle maintenance expenses, traveling or conveyance allowance, children education allowance, hostelboarding allowance for children, leave travel allowance etc.
warm regards,
Umesh Chaudhary
(umesh.chaudhary@ril.com)
From India, Delhi
Hi
Sorry forogt to add, there is a provision of FBT i.e. Fringe Benefit Tax on various allowances such as furnishing allowance, book allowance, fuel and maintenance expenses and it's almost 33%.
Further you may read more about FBT on this link.
http://inhome.rediff.com/money/2005/aug/31tax.htm
OR http://www.moneycontrol.com/mccode/n...?autono=164217
warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)
=============================================
Fringe Benefit Tax
Fringe Benefit Tax ("FBT") is introduced by Finance Act, 2005 as an 'additional income tax' payable by an employer at the rate of 30% (plus surcharge and education cess) on the prescribed value of fringe benefits deemed to have been provided by the employer to its employees.
Fringe benefit means any consideration for employment provided by way of:
Any privilege, service, facility or amenity, directly or indirectly, provided by an employer to employees/ former employees, whether by way of reimbursement or otherwise (including former employees);
Free or concessional tickets provided for private journeys of employees or their family members; and
Employer's contributions to an approved superannuation fund for employees.
Fringe benefits do not include any privilege, service, facility or amenity on which tax is paid or payable by the employee.
For purposes of deemed fringe benefits, the FBT legislation has identified an exhaustive list of expenses which are deemed to be fringe benefits to the extent of 20% or 50% of the cost incurred or payment made by the employer.
FBT paid by an employer is not an allowable expenditure while computing the net taxable income of the employer. Further, FBT is payable even where no income tax is payable by the employer.
source: http://nasscom.in <link updated to site home>
From India, Delhi
Sorry forogt to add, there is a provision of FBT i.e. Fringe Benefit Tax on various allowances such as furnishing allowance, book allowance, fuel and maintenance expenses and it's almost 33%.
Further you may read more about FBT on this link.
http://inhome.rediff.com/money/2005/aug/31tax.htm
OR http://www.moneycontrol.com/mccode/n...?autono=164217
warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)
=============================================
Fringe Benefit Tax
Fringe Benefit Tax ("FBT") is introduced by Finance Act, 2005 as an 'additional income tax' payable by an employer at the rate of 30% (plus surcharge and education cess) on the prescribed value of fringe benefits deemed to have been provided by the employer to its employees.
Fringe benefit means any consideration for employment provided by way of:
Any privilege, service, facility or amenity, directly or indirectly, provided by an employer to employees/ former employees, whether by way of reimbursement or otherwise (including former employees);
Free or concessional tickets provided for private journeys of employees or their family members; and
Employer's contributions to an approved superannuation fund for employees.
Fringe benefits do not include any privilege, service, facility or amenity on which tax is paid or payable by the employee.
For purposes of deemed fringe benefits, the FBT legislation has identified an exhaustive list of expenses which are deemed to be fringe benefits to the extent of 20% or 50% of the cost incurred or payment made by the employer.
FBT paid by an employer is not an allowable expenditure while computing the net taxable income of the employer. Further, FBT is payable even where no income tax is payable by the employer.
source: http://nasscom.in <link updated to site home>
From India, Delhi
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