Dear all learned HRiians,
I just want to collect an information from your end in respect of incentives & CTC. Whether any sales/service incentives or commissions due to the employee are part of CTC or not? If an incentive/ commission is a part of CTC, then it's OK. But if it's not a part of CTC, then why? Any kind of clarification is esteemely solicited from your end to make me obliged. Thank you.
Biswajit Pani
E-mail Id. :
From India, Bhubaneswar
13I just want to collect an information from your end in respect of incentives & CTC. Whether any sales/service incentives or commissions due to the employee are part of CTC or not? If an incentive/ commission is a part of CTC, then it's OK. But if it's not a part of CTC, then why? Any kind of clarification is esteemely solicited from your end to make me obliged. Thank you.
Biswajit Pani
E-mail Id. :
From India, Bhubaneswar
Usually Sales/Service incentives is a variable component in remuneration of an employee specially in case of Sales/Service Department of company, and it depend on volume of sales made by employee.
You can divide incentive in three parts for different type of employees:
1. Fully Variable: For Sales and Service Employees can be given this type of incentive, fully dependant on performance. This is just like commission given to insurance agents.
2. Semi-variable incentive: E.G. Rs.5000.00 p.m. in addition Rs.250.00 per machine. (or slab wise, as company can set an incentive policy). usually this type of incentive follows in Trading organisations.
3. Fixed Incentive: This can be part of CTC (Just like statutory Bonus) and usually given to Admin/Accounts Staff.
Apaprt from these three incentives company can declare special incentive on performance of Employee or Turnover acheived by company or Net Profit eraned by company.
For tax point of view it does not make any difference for an employee whether it is part of CTC or given in addition to CTC as per his appointment terms, as it will be taxable as Salary only.
Hope it is clear.
Regards,
Sukhvinder S. Bhatia
From India, Delhi
You can divide incentive in three parts for different type of employees:
1. Fully Variable: For Sales and Service Employees can be given this type of incentive, fully dependant on performance. This is just like commission given to insurance agents.
2. Semi-variable incentive: E.G. Rs.5000.00 p.m. in addition Rs.250.00 per machine. (or slab wise, as company can set an incentive policy). usually this type of incentive follows in Trading organisations.
3. Fixed Incentive: This can be part of CTC (Just like statutory Bonus) and usually given to Admin/Accounts Staff.
Apaprt from these three incentives company can declare special incentive on performance of Employee or Turnover acheived by company or Net Profit eraned by company.
For tax point of view it does not make any difference for an employee whether it is part of CTC or given in addition to CTC as per his appointment terms, as it will be taxable as Salary only.
Hope it is clear.
Regards,
Sukhvinder S. Bhatia
From India, Delhi
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