Dear All,
I would like to know how the gratuity is paid when a person completes his services for more than 5 years. Whether the gratuity is a part of the salary structure paid by the employer. What necessary forms are required?
Help me out...
Regards,
N. Manikandan
From India, Madras
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I would like to know how the gratuity is paid when a person completes his services for more than 5 years. Whether the gratuity is a part of the salary structure paid by the employer. What necessary forms are required?
Help me out...
Regards,
N. Manikandan
From India, Madras
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Hi, I have gone through the Excel sheet, but there are no deductions like PF (employee share) and TDS. Net and gross salary should be indicated after mandatory deductions. CTC provides a clear picture to the company but not the net salary, which is a clear picture for an employee. Therefore, it's an incomplete salary structure posted in the formatted Excel sheet.
Regards,
Khadir
From India, Chennai
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294Regards,
Khadir
From India, Chennai
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If you get Rs. 30,000.00 as CTC, you may calculate as follows:
Basic: 13,200
DA: 6,500
HRA: 4,190
Conv: 1,000
PF employer share: 2,364
----------------
Total: 27,254
For IT purposes, not mentioned in the salary register:
- Medical allowances: 1,250/month
- LTA: 1,500/month
So, the total amount would be: 27,254 + 1,250 + 1,500 = 30,004.00
From India, Selam
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Basic: 13,200
DA: 6,500
HRA: 4,190
Conv: 1,000
PF employer share: 2,364
----------------
Total: 27,254
For IT purposes, not mentioned in the salary register:
- Medical allowances: 1,250/month
- LTA: 1,500/month
So, the total amount would be: 27,254 + 1,250 + 1,500 = 30,004.00
From India, Selam
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Dear Vijayanath,
You have made a commendable effort to create a worksheet for calculating the various components of Pay & Allowances from a given CTC. However, there is a lack of rationale in the percentages assigned to the different components, which renders the calculations illogical. For instance, you have designated 36.5% of the CTC as the Basic Salary and 50% of the Basic Salary as House Rent Allowance. Additionally, Conveyance Allowance, Telephone Allowance, Education Allowance, and Medical Allowance have been set as fixed amounts. Leave Travel Allowance is calculated as one month (1/12) of the Basic Salary. Furthermore, 12% of the Basic Salary is allocated as the Employer's Share of Provident Fund contribution, and 4.81% as the Employer's Share of Gratuity contribution. Performance Bonus is determined as 15% of the Basic Salary, and the difference between all these components and the assumed CTC is labeled as Special Allowance. Notably, the calculation overlooks components such as Dearness Allowance, compensatory allowances, and others that are typically part of the monthly salary.
This methodology for determining the various components of Pay & Allowances from a given CTC appears arbitrary and flawed. It may not be universally applicable and fails to consider the provisions of various Labor Laws. Moreover, the worksheet does not align with the specific policies of individual employers, as it presents a generalized approach. Substantial revisions are required to make this worksheet functional and adaptable to individual needs.
Please let me know if you need any further assistance or clarification.
Best regards,
[Your Name]
From India, Chandigarh
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You have made a commendable effort to create a worksheet for calculating the various components of Pay & Allowances from a given CTC. However, there is a lack of rationale in the percentages assigned to the different components, which renders the calculations illogical. For instance, you have designated 36.5% of the CTC as the Basic Salary and 50% of the Basic Salary as House Rent Allowance. Additionally, Conveyance Allowance, Telephone Allowance, Education Allowance, and Medical Allowance have been set as fixed amounts. Leave Travel Allowance is calculated as one month (1/12) of the Basic Salary. Furthermore, 12% of the Basic Salary is allocated as the Employer's Share of Provident Fund contribution, and 4.81% as the Employer's Share of Gratuity contribution. Performance Bonus is determined as 15% of the Basic Salary, and the difference between all these components and the assumed CTC is labeled as Special Allowance. Notably, the calculation overlooks components such as Dearness Allowance, compensatory allowances, and others that are typically part of the monthly salary.
This methodology for determining the various components of Pay & Allowances from a given CTC appears arbitrary and flawed. It may not be universally applicable and fails to consider the provisions of various Labor Laws. Moreover, the worksheet does not align with the specific policies of individual employers, as it presents a generalized approach. Substantial revisions are required to make this worksheet functional and adaptable to individual needs.
Please let me know if you need any further assistance or clarification.
Best regards,
[Your Name]
From India, Chandigarh
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Basic Salary 50% Rs. 15000/-
Dearness Allowance Rs. 2000/-
House Rent Allowance 40% of Basic + DA Rs. 6800/-
Conveyance Allowance Rs. 800/-
Washing Allowance Rs. 500/-
Children Education Allowance Rs. 100/-
Special Allowance Rs. 3900/-
Gross Salary
I assume that Telephone Expenses and Local Conveyance, which you are paying, are for expenses incurred by the employee for official purposes. You can pay it separately on a voucher also as reimbursement. If you do so, Salary will be Rs. 25000/- and that will impact on Bonus, LTA, Medical, etc.
From India, Bangalore
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Dearness Allowance Rs. 2000/-
House Rent Allowance 40% of Basic + DA Rs. 6800/-
Conveyance Allowance Rs. 800/-
Washing Allowance Rs. 500/-
Children Education Allowance Rs. 100/-
Special Allowance Rs. 3900/-
Gross Salary
I assume that Telephone Expenses and Local Conveyance, which you are paying, are for expenses incurred by the employee for official purposes. You can pay it separately on a voucher also as reimbursement. If you do so, Salary will be Rs. 25000/- and that will impact on Bonus, LTA, Medical, etc.
From India, Bangalore
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Hi all,
I have gone through all suggested structures but don't find any logical base. What I feel is that the salary structure should be designed in a way that statutory compliance for the employer should be minimum and, at the same time, employees' income tax should be low. Moreover, take-home salary would be another important thing that should be considered while deciding the basics because PF deduction gets influenced by this. For tax benefit, payment of different allowances should be barred, and reimbursement should be given priority.
I suggest the attached structure.
From India, New Delhi
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I have gone through all suggested structures but don't find any logical base. What I feel is that the salary structure should be designed in a way that statutory compliance for the employer should be minimum and, at the same time, employees' income tax should be low. Moreover, take-home salary would be another important thing that should be considered while deciding the basics because PF deduction gets influenced by this. For tax benefit, payment of different allowances should be barred, and reimbursement should be given priority.
I suggest the attached structure.
From India, New Delhi
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Normally, the structure will be as follows:
If your company has pay scales or not, you can set it as below:
1. Basic: 45% to 50%
2. DA: 15% to 10%
3. HRA: 25% to 30%
4. CCA: 15% to 10%
Rs. 25,000/- can be fixed as above.
Rs. 5000/- can be shown as reimbursement for telephone expenses.
Regards
From India, Hyderabad
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If your company has pay scales or not, you can set it as below:
1. Basic: 45% to 50%
2. DA: 15% to 10%
3. HRA: 25% to 30%
4. CCA: 15% to 10%
Rs. 25,000/- can be fixed as above.
Rs. 5000/- can be shown as reimbursement for telephone expenses.
Regards
From India, Hyderabad
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Dear Nikash, TNT, and others,
How do you calculate gratuity as 4.81%? Is it payable monthly along with the salary or upon termination of the service contract? The eligibility for gratuity is 5 years of service. How can it be initially included in the salary? Are the fixed allowances truly fixed for everyone, or are they adjusted as needed?
You introduce special allowances to offset differences and reach the CTC. This seems very arbitrary. Which components are subject to Income Tax and which are not, and why? It appears to be a haphazard way of handling things, with different criteria for each individual and no clear policies or guidelines to follow.
There are numerous ways to approach this, with no set policies, limits, or formats to adhere to. It seems like a free-for-all with no standard procedures in place, which I find concerning.
I do not appreciate this approach.
From India, Chandigarh
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How do you calculate gratuity as 4.81%? Is it payable monthly along with the salary or upon termination of the service contract? The eligibility for gratuity is 5 years of service. How can it be initially included in the salary? Are the fixed allowances truly fixed for everyone, or are they adjusted as needed?
You introduce special allowances to offset differences and reach the CTC. This seems very arbitrary. Which components are subject to Income Tax and which are not, and why? It appears to be a haphazard way of handling things, with different criteria for each individual and no clear policies or guidelines to follow.
There are numerous ways to approach this, with no set policies, limits, or formats to adhere to. It seems like a free-for-all with no standard procedures in place, which I find concerning.
I do not appreciate this approach.
From India, Chandigarh
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Hi,
Can anyone help me to know how much tax benefit I receive through the following allowances monthly and yearly?
1. House Rent Allowance
2. Conveyance Allowance
3. Education Allowance
4. Special Allowance
5. Medical Allowance
6. Leave Travel Allowance
7. Telephone Allowance
Best Regards,
Dash
From India, Mumbai
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Can anyone help me to know how much tax benefit I receive through the following allowances monthly and yearly?
1. House Rent Allowance
2. Conveyance Allowance
3. Education Allowance
4. Special Allowance
5. Medical Allowance
6. Leave Travel Allowance
7. Telephone Allowance
Best Regards,
Dash
From India, Mumbai
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