Dear Team,
in my company we are planing to go revise the salary for the employees how does it will change in Basic, HRA, and other headings .
for example : if the employee getting 15K as a CTC. In the breakup Basic Salary ,House Rent Allowance, Conveyance Allowance, Medical, Leave Travel Allowance, Education Allowance, Washing Allowance, Mobile Allowance, Statutory Bonus, Special Allowance + Employeer contribution to ESI and PF
my question is
1) it will change in all the heads are is there any restriction in medical allowance and phone allowance and so on
kindly advice as soon as
Thanks and regards
kumarram
From India , Madras
in my company we are planing to go revise the salary for the employees how does it will change in Basic, HRA, and other headings .
for example : if the employee getting 15K as a CTC. In the breakup Basic Salary ,House Rent Allowance, Conveyance Allowance, Medical, Leave Travel Allowance, Education Allowance, Washing Allowance, Mobile Allowance, Statutory Bonus, Special Allowance + Employeer contribution to ESI and PF
my question is
1) it will change in all the heads are is there any restriction in medical allowance and phone allowance and so on
kindly advice as soon as
Thanks and regards
kumarram
From India , Madras
Please ensure your basic/da( special allowance) is meeting the requirement of minimum wages norms of your area. Rest as per your convenience.
From India, Pune
467From India, Pune
Dear Mr Prashant,
pleasure to see your answer, i am from Chennai so Tamilnadu minimum wages norms will be applicable normally in private basic means basic +DA only right. in government only DA will be calculated separably. and then Special allowance also fully taxable is and it. please clarify. thanks
and can we give the same percentage to all the heads? if it is 10% will it be applied to all the House Rent Allowance, Conveyance Allowance, Medical, Leave Travel Allowance, Education Allowance, Washing Allowance, Mobile Allowance, Statutory Bonus.
as you have mentioned it is our convenient only even though i have doughy. thanks
thanks and regards
From India , Madras
pleasure to see your answer, i am from Chennai so Tamilnadu minimum wages norms will be applicable normally in private basic means basic +DA only right. in government only DA will be calculated separably. and then Special allowance also fully taxable is and it. please clarify. thanks
and can we give the same percentage to all the heads? if it is 10% will it be applied to all the House Rent Allowance, Conveyance Allowance, Medical, Leave Travel Allowance, Education Allowance, Washing Allowance, Mobile Allowance, Statutory Bonus.
as you have mentioned it is our convenient only even though i have doughy. thanks
thanks and regards
From India , Madras
Dear,
Basic plus DA is not mean to mimimum wages do ensure gross salary should not be less then the minimum wages as prescribed by your state govt.
You can even revise the salary structure with the mutual consent of concern employees by complying the provision of section 9A of ID act. 1947 if employee is categorized as workman. Make sure all the others components should not be more then basic salary for the contributions of statutory deductions.
The components such as Medical reimbursement, HRA, conveyance, LTA, education allowances etc. Is prodominantly to provide the tax benefit to employees its not categorized as statutory components. Hence you can put the certain percentage of these components No issue?
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor
From India, Agra
Basic plus DA is not mean to mimimum wages do ensure gross salary should not be less then the minimum wages as prescribed by your state govt.
You can even revise the salary structure with the mutual consent of concern employees by complying the provision of section 9A of ID act. 1947 if employee is categorized as workman. Make sure all the others components should not be more then basic salary for the contributions of statutory deductions.
The components such as Medical reimbursement, HRA, conveyance, LTA, education allowances etc. Is prodominantly to provide the tax benefit to employees its not categorized as statutory components. Hence you can put the certain percentage of these components No issue?
Thanks & Regards
V SHAKYA
HR & Labour, Corporate Laws Advisor
From India, Agra
Dear Kumar,
You have to make things clear first. Having said that, you have to have a clear idea as to how to go about it. For the simple reason, you are starting with CTC revision as a whole, right ?. List out components of CTC, among them what is determined as lumpsum (a fixed amount) and what is directly worked on the basic pay/salary in terms of %. Then arrive at what is the quantum of %age of increase over all you are proposing and place it side by side. First of all you have to bifurcate your components in to two - ie. payable in cash/cheque or bank credit (recurring monthly) which has direct bearing on take home money of employees such as basis, DA, HRA, Conveyance, incentive bonus etc. Then comes the other components which is not payable monthly (non cash costs) but forms part of CTC. Then there are other components which are either reimbursed on actual incurred basis like medical may be recurring monthly or thru' medical insurance/LTA (allowance paid monthly or annual or paid as reimbursed once in a block of 2 yrs or 4 yrs on actual incurred basis subject to grade wise slabs/limits prescribed as per your policy. Statutory bonus is an annual affair. There are components which are only due after retirement/separation like resignation, retirement or encashable while leaving such as EPF, Gratuity, leave encashment. All these are part of CTC. It is also possible as a part of revision all these, or some of these either in quantum or in terms of %age can be revised as per your present thinking. So if you ask us whether all these components will change or not, the answer to the above observation would give you the suggestion. The answer is with you only. If you tell us what is your existing structure then we can suggest you. A sample structure is attached to give you an idea (not accurately calculated & blanks, rates to be updated).
From India, Bangalore
You have to make things clear first. Having said that, you have to have a clear idea as to how to go about it. For the simple reason, you are starting with CTC revision as a whole, right ?. List out components of CTC, among them what is determined as lumpsum (a fixed amount) and what is directly worked on the basic pay/salary in terms of %. Then arrive at what is the quantum of %age of increase over all you are proposing and place it side by side. First of all you have to bifurcate your components in to two - ie. payable in cash/cheque or bank credit (recurring monthly) which has direct bearing on take home money of employees such as basis, DA, HRA, Conveyance, incentive bonus etc. Then comes the other components which is not payable monthly (non cash costs) but forms part of CTC. Then there are other components which are either reimbursed on actual incurred basis like medical may be recurring monthly or thru' medical insurance/LTA (allowance paid monthly or annual or paid as reimbursed once in a block of 2 yrs or 4 yrs on actual incurred basis subject to grade wise slabs/limits prescribed as per your policy. Statutory bonus is an annual affair. There are components which are only due after retirement/separation like resignation, retirement or encashable while leaving such as EPF, Gratuity, leave encashment. All these are part of CTC. It is also possible as a part of revision all these, or some of these either in quantum or in terms of %age can be revised as per your present thinking. So if you ask us whether all these components will change or not, the answer to the above observation would give you the suggestion. The answer is with you only. If you tell us what is your existing structure then we can suggest you. A sample structure is attached to give you an idea (not accurately calculated & blanks, rates to be updated).
From India, Bangalore
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Salary Revision formulas- CA.doc
Salary Revision.xls