Hi !I am working in a Textile ( Manufacturing ) company having 300 staff members. In the current ecnomic recession, my comany has decided to cut down the Salary Cost by 5% t0 20% keeping in view the Salary of the Emloyees . I need following clarification from the Seniors -1. Can we reduce the Basic Slary of anyone ? 2. Our maximum employees are getting Basic Salary more than Rs. 6,500/- P.M.3. The employees P.F contribution is being deducted 12 % of his Basic Salary even getting morethan Rs. 6,500/- and same amt. is being deposited towards employer contribution.4.What Standard should we adopted to reduce the Salary such as - 1. Should we go for different flat reduction ratio of Salary Slab? 2. Should we go for different flat reduction ratio of Level wise (Designation)? 3. Should we go for flat reduction equal ratio for overall employees ? Please let me know about any other options.Thanx,Anurag
From India, Indore
1From India, Indore
Hi,
Basic can not be reduced at any cost. You will have to make a deduction in allowance other than basic and DA. % can be decided based upon levels or grades. Higher the level higher deduction. Try to reduce the components which are taxable, so even if there is a salary cut, some tax saving is also done, with reduced tax. SO that net salary will very less eftect.
Regards,
Harshad
From India, Mumbai
Basic can not be reduced at any cost. You will have to make a deduction in allowance other than basic and DA. % can be decided based upon levels or grades. Higher the level higher deduction. Try to reduce the components which are taxable, so even if there is a salary cut, some tax saving is also done, with reduced tax. SO that net salary will very less eftect.
Regards,
Harshad
From India, Mumbai
Hi,
I would'nt really advise a reduction of Basic Salary. You may look at reducing the other allowances and benefits that employees get.
As far as the percentage is concerned,
1. you may have different percentages for employees in different bands (viz top management, middle level management, team leaders and officers/executives). A higher percentage may be considered for employees in higher bands as compared to the lower ones.
2. The percentage may vary depending on the target of salary cost cuts that you have received from your top management.
Hope this helps
From India, Mumbai
I would'nt really advise a reduction of Basic Salary. You may look at reducing the other allowances and benefits that employees get.
As far as the percentage is concerned,
1. you may have different percentages for employees in different bands (viz top management, middle level management, team leaders and officers/executives). A higher percentage may be considered for employees in higher bands as compared to the lower ones.
2. The percentage may vary depending on the target of salary cost cuts that you have received from your top management.
Hope this helps
From India, Mumbai
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Salary working format.xls