Is it compulsory to maintain same salary structure for all employee of organization ? can it be differed with employee to employee. ( Basic + DA + HRA @ 40% etc..) can we use multiple structures ?
From India, Mumbai
2From India, Mumbai
Dear Dipesh,
No, you cannot have multiple salary break ups. Salary break up should be absolutely uniform irrespective of the designation or department in which employees work.
Multiple salary break ups will have different percentage of basic salary. This difference will get reflected in the PF contribution also. In the PF inspection, on what grounds you will justify the multiple salary breaks ups?
Consistency and uniformity are the fundamental principles of law. Remove these fundamental principles and you will find a rule of whims and fancies, manipulations etc.
Thanks,
Dinesh Divekar
From India, Bangalore
No, you cannot have multiple salary break ups. Salary break up should be absolutely uniform irrespective of the designation or department in which employees work.
Multiple salary break ups will have different percentage of basic salary. This difference will get reflected in the PF contribution also. In the PF inspection, on what grounds you will justify the multiple salary breaks ups?
Consistency and uniformity are the fundamental principles of law. Remove these fundamental principles and you will find a rule of whims and fancies, manipulations etc.
Thanks,
Dinesh Divekar
From India, Bangalore
Dear Dinesh ji,
I differ with your answer.
In my view, one can have different salary structure for diffrent categories of employees.
Todays practice, many companies have entirely different and flexible structure for every employee. Employees are given an option to choose their own structure.
PF authority has nothing to do with structure. Only thing, basic component is to be given not less than minimum wage rate and HRA is payable as per law, if applicable. Once the basic and gross is fixed, then it can not be reduced.
In old days there were cases of in-discrimination. But now, since employee choose the structure or accept the structure, there are no cases of in-discrimination.
From India, Mumbai
I differ with your answer.
In my view, one can have different salary structure for diffrent categories of employees.
Todays practice, many companies have entirely different and flexible structure for every employee. Employees are given an option to choose their own structure.
PF authority has nothing to do with structure. Only thing, basic component is to be given not less than minimum wage rate and HRA is payable as per law, if applicable. Once the basic and gross is fixed, then it can not be reduced.
In old days there were cases of in-discrimination. But now, since employee choose the structure or accept the structure, there are no cases of in-discrimination.
From India, Mumbai
No you cannot have different salary structure. The salary structure should be same . Regards r sudhakar
From India, Bangalore
From India, Bangalore
Dear Friend,
Why are you looking for different salary structure for different employee ? Are you trying to work on Tax exemption part or on Perks which are given to senior management ?
Please brief us .
Regards,
Sapana
From India, Pune
Why are you looking for different salary structure for different employee ? Are you trying to work on Tax exemption part or on Perks which are given to senior management ?
Please brief us .
Regards,
Sapana
From India, Pune
Dear Mr Korgaonkar KA,
I have spoken with my friend who works in EPFO. He has confirmed that objection from PF Enforcement Officer may come if the there is variation in percentage of basic because variation will impact the amount of PF contribution.
Suppose there are three employee, A, B and C. Each has gross salary of Rs 30,000/- Suppose A has basic of Rs 10,000/- , B has basic of Rs 12,000/- and C has basic of Rs 15,000/- then PF the Enforcement Officer could object the variation in the basic percentage.
Thanks,
Dinesh Divekar
From India, Bangalore
I have spoken with my friend who works in EPFO. He has confirmed that objection from PF Enforcement Officer may come if the there is variation in percentage of basic because variation will impact the amount of PF contribution.
Suppose there are three employee, A, B and C. Each has gross salary of Rs 30,000/- Suppose A has basic of Rs 10,000/- , B has basic of Rs 12,000/- and C has basic of Rs 15,000/- then PF the Enforcement Officer could object the variation in the basic percentage.
Thanks,
Dinesh Divekar
From India, Bangalore
Dear All,
To my opinion the topic has multiple dimension. In today's scenario for salary structure there are issues like Minimum Wages, PF effect, Gratuity effect, Bonus, ITAX friendly pocket for higher salary emps, Flexible pay, Variable pay etc. etc. My personal views regarding scientific salary structure are :-
1. It must protect the Minimum wages or more while paying monthly gross salary.
2. PF authority usually suggest 50% Basic/Basic & DA of monthly gross up to 15k monthly Basic/Basic& DA. Beyond that legally the authority has nothing to say. Therefore, up to 30k monthly gross salary PF gross (Basic/ Basic & DA) may be 50%. Beyond that it may be less than that.
3. More the Basic more the liability of Gratuity. Therefore, the Company's are controlling CTC considering all these factors
.
4. There are ITAX related pocket e.g. HRA, Conveyance, Medical, LTA etc. should be considered for higher salary level employees.
5. Not necessarily same salary structure and same % for all category of employees across the Organisation.
6. One example for salary structure - Technician category monthly gross ranges from 15k to 30 k where basic is 50% of monthly gross and 1600 conveyance allowance & rest is HRA. Supervisor category/Jr. Officer - monthly gross 35k to 50k and basic is 45% of monthly gross, conveyance 1600/- per mn , Medical allow- 1250/mn & rest is HRA. Yrly LTA pocket may be there considering the CTC effect. Asstt Manager/Manager Category - monthly gross 55k to 1 lac - basic is 40% of mnly gross, then conveyance and medical allowance as mentioned above and rest may be in HRA,CCA & LTA. Sr. Manager/GM and above - monthly gross 1.2 lac and above, basic is 35% of mnly gross, Conveyance, Medical, HRA, CCA,LTA etc rest plus may be some variable pay as incentive ( formula may be based on business result & individual performance etc.) to offer/meet certain CTC level. There may be certain other perks eg. Co's car, Club membership etc. etc.
7. Some Organizations now a days are offering flexible pay where against certain CTC- mnly gross is fixed, basic is fixed and certain items of salary structure are offered to individual for selection. May be some other innovative way other organizations are thinking today.
8. Unionized Organizations have pay structure ( basic structure) for different category of Unionized employees along with other items but for Management category usually determined by the organizations.
So to my opinion it is not a very simple task - need detail study and vary from organization to organization.
Thanks & Regds.,
S K Bandyopadhyay, Kolkata
USD HR Solutions
From India, New Delhi
To my opinion the topic has multiple dimension. In today's scenario for salary structure there are issues like Minimum Wages, PF effect, Gratuity effect, Bonus, ITAX friendly pocket for higher salary emps, Flexible pay, Variable pay etc. etc. My personal views regarding scientific salary structure are :-
1. It must protect the Minimum wages or more while paying monthly gross salary.
2. PF authority usually suggest 50% Basic/Basic & DA of monthly gross up to 15k monthly Basic/Basic& DA. Beyond that legally the authority has nothing to say. Therefore, up to 30k monthly gross salary PF gross (Basic/ Basic & DA) may be 50%. Beyond that it may be less than that.
3. More the Basic more the liability of Gratuity. Therefore, the Company's are controlling CTC considering all these factors
.
4. There are ITAX related pocket e.g. HRA, Conveyance, Medical, LTA etc. should be considered for higher salary level employees.
5. Not necessarily same salary structure and same % for all category of employees across the Organisation.
6. One example for salary structure - Technician category monthly gross ranges from 15k to 30 k where basic is 50% of monthly gross and 1600 conveyance allowance & rest is HRA. Supervisor category/Jr. Officer - monthly gross 35k to 50k and basic is 45% of monthly gross, conveyance 1600/- per mn , Medical allow- 1250/mn & rest is HRA. Yrly LTA pocket may be there considering the CTC effect. Asstt Manager/Manager Category - monthly gross 55k to 1 lac - basic is 40% of mnly gross, then conveyance and medical allowance as mentioned above and rest may be in HRA,CCA & LTA. Sr. Manager/GM and above - monthly gross 1.2 lac and above, basic is 35% of mnly gross, Conveyance, Medical, HRA, CCA,LTA etc rest plus may be some variable pay as incentive ( formula may be based on business result & individual performance etc.) to offer/meet certain CTC level. There may be certain other perks eg. Co's car, Club membership etc. etc.
7. Some Organizations now a days are offering flexible pay where against certain CTC- mnly gross is fixed, basic is fixed and certain items of salary structure are offered to individual for selection. May be some other innovative way other organizations are thinking today.
8. Unionized Organizations have pay structure ( basic structure) for different category of Unionized employees along with other items but for Management category usually determined by the organizations.
So to my opinion it is not a very simple task - need detail study and vary from organization to organization.
Thanks & Regds.,
S K Bandyopadhyay, Kolkata
USD HR Solutions
From India, New Delhi
Hi, Yes, it is compulsory to maintain same salary structure for all the employees.
From India, Ahmadabad
From India, Ahmadabad
Dear S K Bandyopadhyay ji,
Thanks for your contribution.
In fact you have supported my contention in this subject matter although you have not said it.
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From India, Mumbai
Thanks for your contribution.
In fact you have supported my contention in this subject matter although you have not said it.
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From India, Mumbai
Not clear as to whether the employer is a PSU or private and also the question was about workmen or Officers. In private sector, they are free to maintain pay packets confidential. In PSUs, such difference may invite writ stating discrimination. For workmen in private or PSU, it may be based on settlements signed under the Industrial Disputes Act
From India, Bangalore
From India, Bangalore
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