I need to know if there is a formula to break CTC . In the following example I tried to break CTC of Rs.10000.00 however I don’t het the desired results. I could definitely adjust the remaining Rs.173.8 in the other allowances however is right way to do it? All of your help would be highly appreciated.
CTC= 10000
Gross Assumption: 9000
Proposed breakup
Basic @50% of Gross = Rs 4500.00
HRA @ 50% of Basic = Rs. 2250.00
Conveyance = Rs. 800.00
Education Allowance = Rs. 200.00
others = Rs. 1250.00
Monthly Gross = Rs.9000
Employer Liabilities
P.F. @13.61% of basic = Rs.612.45
ESI @4.75 % of basic = Rs213.75
CTC= Gross+ Liabilities
=9000+612.45+213.75= Rs.9826.2
From India, Mumbai
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1CTC= 10000
Gross Assumption: 9000
Proposed breakup
Basic @50% of Gross = Rs 4500.00
HRA @ 50% of Basic = Rs. 2250.00
Conveyance = Rs. 800.00
Education Allowance = Rs. 200.00
others = Rs. 1250.00
Monthly Gross = Rs.9000
Employer Liabilities
P.F. @13.61% of basic = Rs.612.45
ESI @4.75 % of basic = Rs213.75
CTC= Gross+ Liabilities
=9000+612.45+213.75= Rs.9826.2
From India, Mumbai
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Hi,
You have done the CTC breakup correctly. However, the Employer's liability for PF contribution should not be stated as 13.61%. Please only include 12% in the CTC. The remaining amount should be categorized as Administrative charges and should not be added to the CTC breakup.
From India, Mumbai
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You have done the CTC breakup correctly. However, the Employer's liability for PF contribution should not be stated as 13.61%. Please only include 12% in the CTC. The remaining amount should be categorized as Administrative charges and should not be added to the CTC breakup.
From India, Mumbai
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You can definitely adjust the remaining Rs. 173.8 in other allowances; it would be correct. PF Admin charges are to be considered as part of CTC, so the remaining part of the calculation is also correct. Please check the minimum wages for your area.
Thank you.
From India, Mumbai
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Thank you.
From India, Mumbai
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Hi Suhas,
Can you tell me the relation between CTC and minimum wages, and how they are interconnected? Administrative charges are to be paid separately by an employer and should not be included in CTC. I have reviewed the CTC breakdowns of several top companies, and they do not include administrative charges in the CTC. I recommend that you refer to the CTC breakdowns of other companies for more information.
From India, Mumbai
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Can you tell me the relation between CTC and minimum wages, and how they are interconnected? Administrative charges are to be paid separately by an employer and should not be included in CTC. I have reviewed the CTC breakdowns of several top companies, and they do not include administrative charges in the CTC. I recommend that you refer to the CTC breakdowns of other companies for more information.
From India, Mumbai
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Hi Suhas,
I want to ask if you are saying that administrative charges should be included in the CTC. If so, one question arises: should the breakdown of the CTC provided to the employee be reflected in the payslip, showing administrative charges as a deduction? If this is the case, it seems quite unusual. Additionally, how would you factor this into TDS calculations?
From India, Mumbai
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I want to ask if you are saying that administrative charges should be included in the CTC. If so, one question arises: should the breakdown of the CTC provided to the employee be reflected in the payslip, showing administrative charges as a deduction? If this is the case, it seems quite unusual. Additionally, how would you factor this into TDS calculations?
From India, Mumbai
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Dear Suhas,
As far as administrative charges are concerned, they cannot be included in the employee's CTC because they are expenditures for an employer towards statutory contributions that the employer has to pay to the government as per the norms given in the P.F. Act. Therefore, they can't be included in the employees' CTC. As an employer/organization, they have to incur such charges towards statutory obligations.
Thanks.
From India, Madras
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As far as administrative charges are concerned, they cannot be included in the employee's CTC because they are expenditures for an employer towards statutory contributions that the employer has to pay to the government as per the norms given in the P.F. Act. Therefore, they can't be included in the employees' CTC. As an employer/organization, they have to incur such charges towards statutory obligations.
Thanks.
From India, Madras
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Thank you, Ravi, Suhas, and Prabhakar for your valuable inputs. I do want to ask you another question about the Employees' State Insurance Act, 1948, and medical benefits being provided by the employer to the employee.
As per the ESI Act 1948, "Employee earning Rs.15000.00 or less monthly should be covered under this act." So the question is:
(i) Would an employee also be getting a medical allowance of Rs. 1250.00 by the employer, or should he not be eligible for this since he is covered under the ESI Act?
(ii) Is the concept of medical allowance only applicable to employees earning more than Rs. 15000?
From India, Mumbai
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As per the ESI Act 1948, "Employee earning Rs.15000.00 or less monthly should be covered under this act." So the question is:
(i) Would an employee also be getting a medical allowance of Rs. 1250.00 by the employer, or should he not be eligible for this since he is covered under the ESI Act?
(ii) Is the concept of medical allowance only applicable to employees earning more than Rs. 15000?
From India, Mumbai
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Hi, when you are registered under ESI act so medical allowances is not applicable in this situation.
From India, Mumbai
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From India, Mumbai
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CTC is a financial term; it means cost to the company. If a company spends a single rupee for an employee in any terms, then it would be part of CTC, including legal contributions. The term CTC is borrowed from finance, which is why all legal payments done by the employer are also part of CTC, including admin charges. Minimum wages are to be considered while preparing CTC since we should not pay less than the prescribed minimum wages; thus, it has a definite relation with CTC calculation.
Regarding medical allowance: Medical allowance is just a breakup part of the fixed salary. The ESIC act does not say anything about medical allowance. It can still be given even if the salary is higher than ₹15,000 per month.
From India, Mumbai
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Regarding medical allowance: Medical allowance is just a breakup part of the fixed salary. The ESIC act does not say anything about medical allowance. It can still be given even if the salary is higher than ₹15,000 per month.
From India, Mumbai
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