Dear Sir/Madam,
I would like to know how to calculate the salary of an employee using all aspects of the allowances and deductions. I have the Excel sheet with formulas to calculate the salary, but I need to understand how and why these rules are used for the calculation.
Please guide me on the same.
From India, Mumbai
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I would like to know how to calculate the salary of an employee using all aspects of the allowances and deductions. I have the Excel sheet with formulas to calculate the salary, but I need to understand how and why these rules are used for the calculation.
Please guide me on the same.
From India, Mumbai
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Hi Shalini,
Kindly go through the below link
Major Salary Components « hrmexpress
Thanks,
Bhakti
From India, Mumbai
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148Kindly go through the below link
Major Salary Components « hrmexpress
Thanks,
Bhakti
From India, Mumbai
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Dear Shalini,
Following are the 4 major components of the salary structure:
1) Basic, which is 50% of the Gross.
2) HRA, which is 50% of Basic.
3) Education Allowance, which is 20% of Basic.
4) Conveyance, which is 20% of Basic.
However, this breakdown varies from company to company.
From India, Pune
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Following are the 4 major components of the salary structure:
1) Basic, which is 50% of the Gross.
2) HRA, which is 50% of Basic.
3) Education Allowance, which is 20% of Basic.
4) Conveyance, which is 20% of Basic.
However, this breakdown varies from company to company.
From India, Pune
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Hi Shalini,
Kindly go through the below link
Major Salary Components « hrmexpress
Thanks, Bhakti
From India, Mumbai
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Kindly go through the below link
Major Salary Components « hrmexpress
Thanks, Bhakti
From India, Mumbai
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please help me how to pay pf to the govt and esi also what is the procedure please guide me with further details of loan cuttings in payroll how will it be done
From India, Hyderabad
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From India, Hyderabad
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Dear Salini ji,
To answer your query, I will explain it simply as follows:
In a salary sheet, there are four main components:
i. Basic inputs such as rate per day or per month, days payable, etc.
ii. Earnings
iii. Deductions
iv. Net payable
Earnings refer to various components of the salary calculated based on the basic inputs. These components may include Basic, DA/Special Allowance, HRA, and other allowances provided as per the terms of employment. Allowances can include Conveyance, Education, Medical, Washing, shift, Attendance, Leave Travel, etc. You can provide any type of allowance and name it as per your policy or decision. There is no law that compels you to offer any allowances apart from HRA in certain states. In Maharashtra, you must pay a minimum of 5% if you have more than 50 employees.
It should be noted that there is no legal obligation to provide any allowance other than HRA in some states. By law, you are required to pay only Basic and DA or consolidated salary, which must not fall below the minimum rate set by the local authority. This Basic & DA or consolidated salary is used to calculate HRA payment and PF deduction. In my opinion, it is incorrect to split the minimum rate specified by the local authority into Basic, DA, and various allowances or components, and then deduct PF based on a lower amount derived from this breakdown.
The total of all earning components, such as Basic, DA, HRA, and other allowances, is the Gross salary.
ESI, local Tax on Employment, Labour Welfare Fund, Income Tax, and other statutory deductions are calculated based on the Gross salary. Other non-statutory deductions may also apply.
Thank you.
From India, Mumbai
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To answer your query, I will explain it simply as follows:
In a salary sheet, there are four main components:
i. Basic inputs such as rate per day or per month, days payable, etc.
ii. Earnings
iii. Deductions
iv. Net payable
Earnings refer to various components of the salary calculated based on the basic inputs. These components may include Basic, DA/Special Allowance, HRA, and other allowances provided as per the terms of employment. Allowances can include Conveyance, Education, Medical, Washing, shift, Attendance, Leave Travel, etc. You can provide any type of allowance and name it as per your policy or decision. There is no law that compels you to offer any allowances apart from HRA in certain states. In Maharashtra, you must pay a minimum of 5% if you have more than 50 employees.
It should be noted that there is no legal obligation to provide any allowance other than HRA in some states. By law, you are required to pay only Basic and DA or consolidated salary, which must not fall below the minimum rate set by the local authority. This Basic & DA or consolidated salary is used to calculate HRA payment and PF deduction. In my opinion, it is incorrect to split the minimum rate specified by the local authority into Basic, DA, and various allowances or components, and then deduct PF based on a lower amount derived from this breakdown.
The total of all earning components, such as Basic, DA, HRA, and other allowances, is the Gross salary.
ESI, local Tax on Employment, Labour Welfare Fund, Income Tax, and other statutory deductions are calculated based on the Gross salary. Other non-statutory deductions may also apply.
Thank you.
From India, Mumbai
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Dear Mrunal90,
With due respect to you, Madam, I totally disagree with your reply to the querist. I request you to kindly read my posting, as above, in reply to the querist, which may be helpful in correcting yourself.
There is no compulsion to pay HRA at 50%, Education at 20%, and conveyance at 20% as you said. There is no law that says you have to pay Basic at 50% of the Gross. However, you can pay such kinds of allowances as mentioned by you, but the Basic plus DA component should not be less than the minimum rate as declared by the local authority from time to time. On certain allowances, employees get income tax benefits.
I do not mean to discourage you. On the contrary, I appreciate your response.
From India, Mumbai
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With due respect to you, Madam, I totally disagree with your reply to the querist. I request you to kindly read my posting, as above, in reply to the querist, which may be helpful in correcting yourself.
There is no compulsion to pay HRA at 50%, Education at 20%, and conveyance at 20% as you said. There is no law that says you have to pay Basic at 50% of the Gross. However, you can pay such kinds of allowances as mentioned by you, but the Basic plus DA component should not be less than the minimum rate as declared by the local authority from time to time. On certain allowances, employees get income tax benefits.
I do not mean to discourage you. On the contrary, I appreciate your response.
From India, Mumbai
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