Sir, How could we include leave encashment as it is entitled at the time of full and final settlement. Regards, Shia
From India, Ghaziabad
From India, Ghaziabad
Hi All, Can anybody share some useful info on the trends in Compensation management in Indian IT Industry. Awaiting for all your needful help. Thanks and regards KK.
From India, Nizamabad
14From India, Nizamabad
Hi there.
Gratuity is never be included in the CTC as 1.it is a kind of reward being given to an employee who remains with the company for 5 years 2. how can u calculate the amount of a persons, gratuity in the 1st or 2nd year which is to be given after completion of five years 3. there is never a surety that a person would stay with the company for 5 years.
Thanks and regards'
praveen.
From India, Delhi
Gratuity is never be included in the CTC as 1.it is a kind of reward being given to an employee who remains with the company for 5 years 2. how can u calculate the amount of a persons, gratuity in the 1st or 2nd year which is to be given after completion of five years 3. there is never a surety that a person would stay with the company for 5 years.
Thanks and regards'
praveen.
From India, Delhi
Hi,
i guess Gratuity is calculated when we are doing full and final settlement of the employee.its given to the person who has worked for more than 5yrs,even if an employee has worked for 4yrs 6 months would be entitled for gratuity,but if an employee has worked for 4yrs 4 months is not entitled for gratuity.i.e it should be more than 4yrs 5 months.
The formula is
Gratuity=15(Basic pay+D.A)*No.of yrs in the service/26 days
This formula will give u gratuity.
Thanxs
Promila
From India, Delhi
i guess Gratuity is calculated when we are doing full and final settlement of the employee.its given to the person who has worked for more than 5yrs,even if an employee has worked for 4yrs 6 months would be entitled for gratuity,but if an employee has worked for 4yrs 4 months is not entitled for gratuity.i.e it should be more than 4yrs 5 months.
The formula is
Gratuity=15(Basic pay+D.A)*No.of yrs in the service/26 days
This formula will give u gratuity.
Thanxs
Promila
From India, Delhi
Hi Every Body
Cost to company means the cost being incurred by an employer for employing and retaining services of a employee. This includes the following
1. Monthly salary : Component of monthly salary varies from location to location and from employer to employer and also from industry to industry. But the general components are
Basic pay
Dearness allowance
Variable Dearness allowance
House rent Allowance
Payment of Lease rental against hiring of accomodation for employee.
Transport / Conveyance Allowance.
The above components can be renamed depending upon area to area and industry to industry.
2. Medical Reimbursements: Reimbursement of expenses borne by an employee on treatment for himself or other dependent members of the family. This may be limited an amount or unlimited.
3. Subsidies : Subsidies provided by employer to his employees with respect to
Transportation
Food ( Breakfast , Lunch or Dinner)
Interest components of loan for vehicle purchase or House purchase or Land purchase for Building a house or Construction of house etc.
Subsidy on Principal component of loan.
4. Reimbursement of Educational expenses for employees as well as their wards.
5. Insurance : Medical or General insurance : Cost borne by employer for taking policy with respect to above for the employees.
6. Satatutory Contributions towards provident fund and ESI.
7. Bonus / Exgratia : Payments made by employer for payment of statutory bonus or Ex gratia to employees.
8. Incentives ; Incentives paid to employees for achieving targets.
9. Cost of Training : Cost borne by employer for the enhancement of skill of employee. In certain companies this training is essential component for retention of employee and special budget are there to meet the target.
10. Leave Travel Assistance / Reimb. : Cost borne by employer for assisting employee to travel any where on the cost of employer.
11. Leave Encashment : Cost borne by employer to encash the balance of leave available with employee against the company policy.
12. Cost of Gratuity : Cost of Gratuity to be borne by employer for payment to employee.
13. Superannuation cost : Cost borne by employer to pay contributions towards the superannuation fund areated by employer for the benefit of specific or all employees.
14. Reimbursement of News Paper and Magazine Cost : Cost borne by employer to reimburse the expenses incurred by employee for purchase of news paper and magazines for enhancement and to up date knowledge as per company policy.
15. reimbursement of Telephone Expenses : Reimbursement of expenses incurred by employee for use of personal phone / mobile for official purposes as per company policy.
16. Subsidy on purchase of House hold goods.
I believe what soever expenses an employer is bearing on account of employee are cost to company. But for considering a component under CTC , company policy must be in existance.
Regards
Anil Anand
From India, New Delhi
Cost to company means the cost being incurred by an employer for employing and retaining services of a employee. This includes the following
1. Monthly salary : Component of monthly salary varies from location to location and from employer to employer and also from industry to industry. But the general components are
Basic pay
Dearness allowance
Variable Dearness allowance
House rent Allowance
Payment of Lease rental against hiring of accomodation for employee.
Transport / Conveyance Allowance.
The above components can be renamed depending upon area to area and industry to industry.
2. Medical Reimbursements: Reimbursement of expenses borne by an employee on treatment for himself or other dependent members of the family. This may be limited an amount or unlimited.
3. Subsidies : Subsidies provided by employer to his employees with respect to
Transportation
Food ( Breakfast , Lunch or Dinner)
Interest components of loan for vehicle purchase or House purchase or Land purchase for Building a house or Construction of house etc.
Subsidy on Principal component of loan.
4. Reimbursement of Educational expenses for employees as well as their wards.
5. Insurance : Medical or General insurance : Cost borne by employer for taking policy with respect to above for the employees.
6. Satatutory Contributions towards provident fund and ESI.
7. Bonus / Exgratia : Payments made by employer for payment of statutory bonus or Ex gratia to employees.
8. Incentives ; Incentives paid to employees for achieving targets.
9. Cost of Training : Cost borne by employer for the enhancement of skill of employee. In certain companies this training is essential component for retention of employee and special budget are there to meet the target.
10. Leave Travel Assistance / Reimb. : Cost borne by employer for assisting employee to travel any where on the cost of employer.
11. Leave Encashment : Cost borne by employer to encash the balance of leave available with employee against the company policy.
12. Cost of Gratuity : Cost of Gratuity to be borne by employer for payment to employee.
13. Superannuation cost : Cost borne by employer to pay contributions towards the superannuation fund areated by employer for the benefit of specific or all employees.
14. Reimbursement of News Paper and Magazine Cost : Cost borne by employer to reimburse the expenses incurred by employee for purchase of news paper and magazines for enhancement and to up date knowledge as per company policy.
15. reimbursement of Telephone Expenses : Reimbursement of expenses incurred by employee for use of personal phone / mobile for official purposes as per company policy.
16. Subsidy on purchase of House hold goods.
I believe what soever expenses an employer is bearing on account of employee are cost to company. But for considering a component under CTC , company policy must be in existance.
Regards
Anil Anand
From India, New Delhi
Whwn we Calculate Cost to the Company We include all types of monetary benefits, Salary, reimbursments, Performance Allowances, Incentives, Fringe Benefits, being rendered to the Employee. So the Sum total of the All these benefits mentioned turns up into CTC i.e. Cost to Company
Hi Folks,
While reading the postings on various components of CTC - someone has mentioned that Gratuity is also a part of the CTC! - well i disagree with the same..how do you allocate the cost & what if the employee leaves the company after say 3 years..he/she is not elgible for the same..then by what logic or rationality do we include the same?...
Is it fair?
Regards,
Rajat
From India, Pune
While reading the postings on various components of CTC - someone has mentioned that Gratuity is also a part of the CTC! - well i disagree with the same..how do you allocate the cost & what if the employee leaves the company after say 3 years..he/she is not elgible for the same..then by what logic or rationality do we include the same?...
Is it fair?
Regards,
Rajat
From India, Pune
Dear Mr.Rajat
My views differs with respect to non consideration of Gratuity as a part of CTC.
I agree that if employee leave service prior to eligibility period , this amount will not be given to him but once the Payment of Gratuity Act,1972 became applicable on establishment / factory then employer is bound to comply with the statutory provisions as applicable.
Section 4A of the payment of Gratuity Act,1972 makes insurance of gratuity mandatory for employers. Subsection 2 of Section 4A says employer has to obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer.
To comply with this provision every employer has to create a trust who
deals with LIC on behalf of employer. Trust creates a gratuity fund with the help of LIC. LIC keeps the fund and pays interest on the balance. In fact LIC here acts like a bank. Investment made by employer towards the gratuity fund are accepted by I Tax authorities as expenses for the financial year in which the contributions are being paid by employer. Though these payments are to be made to eligible employees in future but with the creation of fund duly recognised by I Tax authorities as forwarded by LIC , are taken as expenses for current financial year by I Tax Authorities.
So when expenses which are actually due in future and employer is discharging the future liability in current under the statutory provisions then there is no harm in considering gratuity as a component to CTC.
Once the employer has paid contribution towards the gratuity fund and also has paid insurance premium to LIC that means he has incurred the expenses on employee.
Now comes the question, if, employee leave service prior to eligibility period. In this case even employer will not get the benefit of refund but certainly he has to pay less contribution for next year and again if a big number of employees entitled to gratuity leave services during the FY , employer has to immediately pay contributions to replenish the gratuity fund. In no case employer can withdraw money from this fund. The balance if excess is to be settled between the members of the trust as per trust rules , regulations and as per the provisions of Income tax.
Further if , employer do not floow the above provisions, he/she can be penalised for violation of statutory provisions with a fine upto Rs.10000.00 for first offence and Rs.1000.00 per day for every consective offence and I beleive if , employer is aware of such provisions or are made aware of such provisions , compliance is not a big problem and they will discharge there liability as per law of the land.
In view of the above I strongly believe that this gratuity is a component of CTC though it is a reward but is protected by Law.
Regards
Anil Anand
From India, New Delhi
My views differs with respect to non consideration of Gratuity as a part of CTC.
I agree that if employee leave service prior to eligibility period , this amount will not be given to him but once the Payment of Gratuity Act,1972 became applicable on establishment / factory then employer is bound to comply with the statutory provisions as applicable.
Section 4A of the payment of Gratuity Act,1972 makes insurance of gratuity mandatory for employers. Subsection 2 of Section 4A says employer has to obtain an insurance in the manner prescribed, for his liability for payment towards the gratuity under this Act, from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956) or any other prescribed insurer.
To comply with this provision every employer has to create a trust who
deals with LIC on behalf of employer. Trust creates a gratuity fund with the help of LIC. LIC keeps the fund and pays interest on the balance. In fact LIC here acts like a bank. Investment made by employer towards the gratuity fund are accepted by I Tax authorities as expenses for the financial year in which the contributions are being paid by employer. Though these payments are to be made to eligible employees in future but with the creation of fund duly recognised by I Tax authorities as forwarded by LIC , are taken as expenses for current financial year by I Tax Authorities.
So when expenses which are actually due in future and employer is discharging the future liability in current under the statutory provisions then there is no harm in considering gratuity as a component to CTC.
Once the employer has paid contribution towards the gratuity fund and also has paid insurance premium to LIC that means he has incurred the expenses on employee.
Now comes the question, if, employee leave service prior to eligibility period. In this case even employer will not get the benefit of refund but certainly he has to pay less contribution for next year and again if a big number of employees entitled to gratuity leave services during the FY , employer has to immediately pay contributions to replenish the gratuity fund. In no case employer can withdraw money from this fund. The balance if excess is to be settled between the members of the trust as per trust rules , regulations and as per the provisions of Income tax.
Further if , employer do not floow the above provisions, he/she can be penalised for violation of statutory provisions with a fine upto Rs.10000.00 for first offence and Rs.1000.00 per day for every consective offence and I beleive if , employer is aware of such provisions or are made aware of such provisions , compliance is not a big problem and they will discharge there liability as per law of the land.
In view of the above I strongly believe that this gratuity is a component of CTC though it is a reward but is protected by Law.
Regards
Anil Anand
From India, New Delhi
hello everybody,
well i am Pursuing my MBA in hyderabad and i would like to know what are the words we use in HR normally,can anybody let me know what are the important words used in HRM in Organisation development and leadership which will be effective.i want to make it clear that i want the words which will be effective in the above topics.
thanks in advance
cheers
uday
From India, Secunderabad
well i am Pursuing my MBA in hyderabad and i would like to know what are the words we use in HR normally,can anybody let me know what are the important words used in HRM in Organisation development and leadership which will be effective.i want to make it clear that i want the words which will be effective in the above topics.
thanks in advance
cheers
uday
From India, Secunderabad
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