Hi Jyothi
Thanks for the input .I wanted to know whether I am on the right track so I posted the salary structure on the site and thanks to citehr I have got some very important pointsexplained by the members of the site.
Thanks and Regards
Indrani Chakraborty
From India, Pune
3Thanks for the input .I wanted to know whether I am on the right track so I posted the salary structure on the site and thanks to citehr I have got some very important pointsexplained by the members of the site.
Thanks and Regards
Indrani Chakraborty
From India, Pune
Hi Indrani
Basic is OK
HRA make 50% of the basic as it serves the Income Tax purpose
Make Medical allowance fixed Rs.1,250 p.m.
Make Conveyance fixed Rs. 800 p.m.
if Possibel make 2 months basic as LTA ( again it serves tax purpose)
if possible again give food coupen Rs.1000 p.m. (tax purpose)
rest give as other allowance
club the other benifits, pf,esic,gratuity,SA then arrive the CTC
Regards
Shiva Kumar H
From India, Davangere
Basic is OK
HRA make 50% of the basic as it serves the Income Tax purpose
Make Medical allowance fixed Rs.1,250 p.m.
Make Conveyance fixed Rs. 800 p.m.
if Possibel make 2 months basic as LTA ( again it serves tax purpose)
if possible again give food coupen Rs.1000 p.m. (tax purpose)
rest give as other allowance
club the other benifits, pf,esic,gratuity,SA then arrive the CTC
Regards
Shiva Kumar H
From India, Davangere
Dear Indu,
As far as my knowledge goes, the way u term it is also imp for tax calculations. If u call it Med 'Allowance' then its taxable the justification being..that Allowance is paid irrespective of the actual expense.
But if u call it Med 'Reimbursement' then its tax-exempted upto 15k per annum coz its the reimbursement of teh actual expenses incurred by the employee.
U can pay this as part of the salary too. but at teh end of the year, u need to collect the bills from the employees. if the employees fail to produce bills for 15k but produce only for say 10k, then 10k is tax-exempted n 5k is added to the taxable income.
also, u can show the variable pay as part of the CTC, with a mention that this amt is paid only on achivement of performance targets.
hope this info was useful.
regards,
deepthi
From India, Hyderabad
As far as my knowledge goes, the way u term it is also imp for tax calculations. If u call it Med 'Allowance' then its taxable the justification being..that Allowance is paid irrespective of the actual expense.
But if u call it Med 'Reimbursement' then its tax-exempted upto 15k per annum coz its the reimbursement of teh actual expenses incurred by the employee.
U can pay this as part of the salary too. but at teh end of the year, u need to collect the bills from the employees. if the employees fail to produce bills for 15k but produce only for say 10k, then 10k is tax-exempted n 5k is added to the taxable income.
also, u can show the variable pay as part of the CTC, with a mention that this amt is paid only on achivement of performance targets.
hope this info was useful.
regards,
deepthi
From India, Hyderabad
Can Mobile/Telephone Reimbursement given to all class of employer? I mean is it necesasry to justify that mobile reimbursement are being given because of the business need or it can be given to any type of Industry as part of their salary structure and is valid as per Income Tax Law
From India, Faridabad
From India, Faridabad
Dear Mr Shivakumar
Thank you for your feedback. A member of the community has asked me to make HRA 40% of the basic and you have asked me to make 50% of the basic .I am confused now what to?
One more thing I wanted to know from you is if our company decides to have a tie up with sodexho or accord for giving food coupons is the employer going to incurr some expenses while having their services .Can you give me some infor mation how the process works?what should be the minimum strength of employees in order to have such a tie-up ?
Thanks and Regards
From India, Pune
Thank you for your feedback. A member of the community has asked me to make HRA 40% of the basic and you have asked me to make 50% of the basic .I am confused now what to?
One more thing I wanted to know from you is if our company decides to have a tie up with sodexho or accord for giving food coupons is the employer going to incurr some expenses while having their services .Can you give me some infor mation how the process works?what should be the minimum strength of employees in order to have such a tie-up ?
Thanks and Regards
From India, Pune
edar Indrani,
1.Medical Allowance is still:- 1250/- & you have to claim for a bill to every employee. this is part of salasry b ut will not show in salary sheet.
after getting the net earnings he will claim his medical reimbursement it may be monthly, quaterly half yearly, yearly depends on the employee.
2. City Compensatory Allowance is fix i.e 10% of the basic.
3. You can provide LTA also which is equal to 2500/- .
4. Child Education allowance:- 200/- rs fixed
5. Conveyance Allowance :- 800/- fix
6. Washing Allowance : -300/- fixed
I think it will give you some help.
regards
RAJNISH SAPRA @ 98711 09974
From India, Delhi
1.Medical Allowance is still:- 1250/- & you have to claim for a bill to every employee. this is part of salasry b ut will not show in salary sheet.
after getting the net earnings he will claim his medical reimbursement it may be monthly, quaterly half yearly, yearly depends on the employee.
2. City Compensatory Allowance is fix i.e 10% of the basic.
3. You can provide LTA also which is equal to 2500/- .
4. Child Education allowance:- 200/- rs fixed
5. Conveyance Allowance :- 800/- fix
6. Washing Allowance : -300/- fixed
I think it will give you some help.
regards
RAJNISH SAPRA @ 98711 09974
From India, Delhi
Dear Mr Suneel
Thank you so much for your feedback.I was not aware about the conveyance allowance clause .I will put it fixed as rs 800.In case we are paying mobile allowance is it mandatory to get the mobile bills ?
Can you please send me your contact number so that I can get in touch with you for some more queries.Hope you dont mind :)
Thanks and Regards
Indrani Chakraborty
From India, Pune
Thank you so much for your feedback.I was not aware about the conveyance allowance clause .I will put it fixed as rs 800.In case we are paying mobile allowance is it mandatory to get the mobile bills ?
Can you please send me your contact number so that I can get in touch with you for some more queries.Hope you dont mind :)
Thanks and Regards
Indrani Chakraborty
From India, Pune
Dear Ms Deepthi
Thank you very much for your input ,I will term the particular component as medical allowance" in that case I guess I need not collect the bills from them
Please correct me if I am wrong
Thank you once again
Thanks and Regards
Indrani Chakraborty
From India, Pune
Thank you very much for your input ,I will term the particular component as medical allowance" in that case I guess I need not collect the bills from them
Please correct me if I am wrong
Thank you once again
Thanks and Regards
Indrani Chakraborty
From India, Pune
As per my understanding, any allowance paid to the employees towards meeting their telephone/mobile bill requirements/obligations falls under the purview of fringe benefit. Ideally speaking, it should be granted to employees who tend to use cellphones/landlines for making official calls however, other members may be better places to throw more light on this.
Important point here is the fact that from taxation point of view it is always advisable to add fringe benefits rather than multiplying/augmenting the salary components directly.
It results in lesser tax liability for the employees making them happier!
Comments welcome!
From India, Mumbai
Important point here is the fact that from taxation point of view it is always advisable to add fringe benefits rather than multiplying/augmenting the salary components directly.
It results in lesser tax liability for the employees making them happier!
Comments welcome!
From India, Mumbai
Dear Indrani,
Compensation struicture varies from organisation to organisation. However these days there is a trend to minimise the components of salary.
Eg:
Part I
Basic pay-
Varies from level to level or can be fixed as 35 % or 40%
HRA-
may vary from level to level or can be same across levels
Other allowances-
This is a variable amount and is also flexible. The employees are given an option to choose a fixed no. of allowances like Conveyance,
Food ,Medical, LTA so that they can claim TAx exemption as per the IT act.
Part II
Statutory requirements:
PF
ESIC -if applicable
Statutory Bonus
Part III
Superanuation scheme -if the employer has
Gratuity
Part IV
Performance Bonus- If the performance parameters are defined for each level and are quantified with Performance Indicators. The maximum applicability of Performance Bonus can be also defined as 3 times BAsic Payor 4 times BAsic pay, as per th ecompany rules and corpus available for distribution against Performance
Retention Bonus: This is an amount which is payable if the employee stays with the company for a specified period
I hope I have given you a fair idea. If you require any specific details pl call me on 9967539298
Archana
Compensation struicture varies from organisation to organisation. However these days there is a trend to minimise the components of salary.
Eg:
Part I
Basic pay-
Varies from level to level or can be fixed as 35 % or 40%
HRA-
may vary from level to level or can be same across levels
Other allowances-
This is a variable amount and is also flexible. The employees are given an option to choose a fixed no. of allowances like Conveyance,
Food ,Medical, LTA so that they can claim TAx exemption as per the IT act.
Part II
Statutory requirements:
PF
ESIC -if applicable
Statutory Bonus
Part III
Superanuation scheme -if the employer has
Gratuity
Part IV
Performance Bonus- If the performance parameters are defined for each level and are quantified with Performance Indicators. The maximum applicability of Performance Bonus can be also defined as 3 times BAsic Payor 4 times BAsic pay, as per th ecompany rules and corpus available for distribution against Performance
Retention Bonus: This is an amount which is payable if the employee stays with the company for a specified period
I hope I have given you a fair idea. If you require any specific details pl call me on 9967539298
Archana
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Creating a Competitive Salary Structure.doc
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