Dear seniors,
My company is new, and I have joined as an HR professional, facing a problem while preparing the salary structure. Kindly guide me with the below components: BASIC/HRA/SPECIAL ALLOWANCE/CONVEYANCE/MEDICAL/OTHER ALLOWANCE/ESIC/PF/PT. Kindly help me to create the structure for a CTC range of 10,000 to 500,000. Your urgent comments are appreciated.
Regards,
Jyotsna
From India, Ahmedabad
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My company is new, and I have joined as an HR professional, facing a problem while preparing the salary structure. Kindly guide me with the below components: BASIC/HRA/SPECIAL ALLOWANCE/CONVEYANCE/MEDICAL/OTHER ALLOWANCE/ESIC/PF/PT. Kindly help me to create the structure for a CTC range of 10,000 to 500,000. Your urgent comments are appreciated.
Regards,
Jyotsna
From India, Ahmedabad
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Hi Seniors,
My name is Jagadeesh, and I am also facing the same challenge as I don't have any experience in compensation design. Can anybody let me know how to design a salary structure?
Thank you,
Jagadeesh
Jagadish.ks970@outlook.com
From India, Visakhapatnam
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My name is Jagadeesh, and I am also facing the same challenge as I don't have any experience in compensation design. Can anybody let me know how to design a salary structure?
Thank you,
Jagadeesh
Jagadish.ks970@outlook.com
From India, Visakhapatnam
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Hi Jyotsna,
Please check whether the amount for PF is fixed (if the basic + DA) at Rs. 15,000 and above, PF can be calculated on Rs. 15,000 itself. If PF is calculated on the full Basic and DA, the allowances will decrease accordingly.
Basic is fixed at 40% of CTC.
HRA is at 40% or 50% of basic (50% if your company is in Delhi, Mumbai, Chennai, or Kolkata).
Conveyance is Rs. 1,600 per month (if you provide a car, then conveyance cannot be provided).
Medical allowance is Rs. 1,250 per month.
LTA is not fixed (but rules by the Govt will become the limiting factor). You can fix it at 1 month of basic.
Telephone - no amount is fixed by the Govt.
Car allowance is Rs. 1,800 per month (if the car CC is below 1.6. If more than 1.6, it is Rs. 2,400).
Driver exemption is Rs. 900 per month.
You can also opt for books and periodicals, uniform allowance, children's education allowance, professional pursuits, etc.
ESI deduction - if Gross is 21,000 and below.
PF - as explained above.
PT - as per the state's slab.
Hope this information will be helpful to you. (Please review income tax - allowances and deductions).
Regards,
Mahesh.H.M.M
[mahesh@florasion.in](mailto:mahesh@florasion.in)
From India, Bangalore
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7Please check whether the amount for PF is fixed (if the basic + DA) at Rs. 15,000 and above, PF can be calculated on Rs. 15,000 itself. If PF is calculated on the full Basic and DA, the allowances will decrease accordingly.
Basic is fixed at 40% of CTC.
HRA is at 40% or 50% of basic (50% if your company is in Delhi, Mumbai, Chennai, or Kolkata).
Conveyance is Rs. 1,600 per month (if you provide a car, then conveyance cannot be provided).
Medical allowance is Rs. 1,250 per month.
LTA is not fixed (but rules by the Govt will become the limiting factor). You can fix it at 1 month of basic.
Telephone - no amount is fixed by the Govt.
Car allowance is Rs. 1,800 per month (if the car CC is below 1.6. If more than 1.6, it is Rs. 2,400).
Driver exemption is Rs. 900 per month.
You can also opt for books and periodicals, uniform allowance, children's education allowance, professional pursuits, etc.
ESI deduction - if Gross is 21,000 and below.
PF - as explained above.
PT - as per the state's slab.
Hope this information will be helpful to you. (Please review income tax - allowances and deductions).
Regards,
Mahesh.H.M.M
[mahesh@florasion.in](mailto:mahesh@florasion.in)
From India, Bangalore
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You cannot imagine things and go ahead as you like. First, have a frank discussion with your bosses and try to know who you are, what the aims and future plans are, how and when you are going to take off, etc. Importantly, try to obtain a complete framework, roadmap, fiscal and financial budgets, at least for the next 5 years if not for 10 years, without which your work will be meaningless. Draw appropriate charts and an HR tree, which will give you a clear idea of how you can proceed. Similarly, you should gain knowledge of similar establishments existing in different parts of the country and abroad that are already running successfully. Future promises, growth opportunities (SWOT analysis), etc., will help you target exactly what you need. The charts and budgeting will determine how your manpower should align with the financial budget. Once your draft is ready, discuss it with the finance head before finalizing your detailed manpower planning.
Legally, there is no fixed percentage or quantum of salary and components of CTC except for minimum wages, EPF, ESI contributions, annual bonus, and gratuity. You need to list out the components of CTC, among which determine what is a lump sum (a fixed amount) and what is directly based on the basic pay/salary in terms of percentage. It's advisable to consult what is prevalent in your counterparts' companies/sector/location. Then, determine the percentage you are proposing and compare it side by side.
First of all, you need to bifurcate your components into two categories - those payable in cash/cheque or bank credit (recurring monthly) which directly impact employees' take-home pay such as basic pay, DA, HRA, conveyance, incentive bonus, etc. Then, there are other components that are not payable monthly (non-cash costs) but form part of CTC. Additionally, there are components that are either reimbursed on an actual incurred basis like medical expenses, which could be recurring monthly or through medical insurance/LTA. Statutory bonus is an annual affair. There are components that are only due after retirement/separation like resignation, retirement benefits, or encashable upon leaving such as EPF, Gratuity, leave encashment. All these are part of CTC. It's also possible that during a revision, some or all of these components, either in quantum or percentage terms, can be adjusted annually or from time to time. A sample is provided in the attachment, which will give you an idea.
From India, Bangalore
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Legally, there is no fixed percentage or quantum of salary and components of CTC except for minimum wages, EPF, ESI contributions, annual bonus, and gratuity. You need to list out the components of CTC, among which determine what is a lump sum (a fixed amount) and what is directly based on the basic pay/salary in terms of percentage. It's advisable to consult what is prevalent in your counterparts' companies/sector/location. Then, determine the percentage you are proposing and compare it side by side.
First of all, you need to bifurcate your components into two categories - those payable in cash/cheque or bank credit (recurring monthly) which directly impact employees' take-home pay such as basic pay, DA, HRA, conveyance, incentive bonus, etc. Then, there are other components that are not payable monthly (non-cash costs) but form part of CTC. Additionally, there are components that are either reimbursed on an actual incurred basis like medical expenses, which could be recurring monthly or through medical insurance/LTA. Statutory bonus is an annual affair. There are components that are only due after retirement/separation like resignation, retirement benefits, or encashable upon leaving such as EPF, Gratuity, leave encashment. All these are part of CTC. It's also possible that during a revision, some or all of these components, either in quantum or percentage terms, can be adjusted annually or from time to time. A sample is provided in the attachment, which will give you an idea.
From India, Bangalore
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Please keep Minimum Wages applicable to your establishment as guideline for fixing basic/DA/VDA.PF Contribution to be on atleast Minimum Wages ESIC, PF, PT ,IT are all deductions from Salary
From India, New Delhi
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From India, New Delhi
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Dear Jyotsana,
Please refer to the below salary structure for your reference.
- Basic Salary (40% of CTC) (Full amount is taxable)
- DA (20% of basic salary) (Depends on company policy. Mostly taxable)
- HRA (50% of basic) (Applicable if living in a rented house)
- Medical reimbursement (Rs. 1250 p.m)
- LTA (depends on company policy) (On submission of bills, exempt to a limit of a certain sum)
- Special allowance (depends on company policy) (taxable)
- Food coupon (based on company regulations)
PF has two types:
1. Restricted PF = deduct on 6500/-
2. Non-restricted PF = deduct on basic+DA
ESIC contribution:
1. Employee contribution = 1.75% of basic+DA
2. Employer contribution = 4.75% of basic+DA
ESIC deduction has two contribution periods in a year.
PT deduction as per state-wise regulations.
TDS deductions depend upon laws.
Regards,
Akanksha
From India, Pune
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Please refer to the below salary structure for your reference.
- Basic Salary (40% of CTC) (Full amount is taxable)
- DA (20% of basic salary) (Depends on company policy. Mostly taxable)
- HRA (50% of basic) (Applicable if living in a rented house)
- Medical reimbursement (Rs. 1250 p.m)
- LTA (depends on company policy) (On submission of bills, exempt to a limit of a certain sum)
- Special allowance (depends on company policy) (taxable)
- Food coupon (based on company regulations)
PF has two types:
1. Restricted PF = deduct on 6500/-
2. Non-restricted PF = deduct on basic+DA
ESIC contribution:
1. Employee contribution = 1.75% of basic+DA
2. Employer contribution = 4.75% of basic+DA
ESIC deduction has two contribution periods in a year.
PT deduction as per state-wise regulations.
TDS deductions depend upon laws.
Regards,
Akanksha
From India, Pune
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Dear Akanksha,
The PF ceiling limit has been enhanced from 6500 to 15000. Hence, if basic plus DA exceeds the ceiling limit, the PF contributions may be restricted to 15000.
Also, as per Section 2(22) of the ESI Act, 1948, ESI contributions shall be made on gross salary, not on basic plus DA.
Thanks & Regards,
V. SHAKYA
HR & Labour, Corporate Laws Advisor
From India, Agra
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The PF ceiling limit has been enhanced from 6500 to 15000. Hence, if basic plus DA exceeds the ceiling limit, the PF contributions may be restricted to 15000.
Also, as per Section 2(22) of the ESI Act, 1948, ESI contributions shall be made on gross salary, not on basic plus DA.
Thanks & Regards,
V. SHAKYA
HR & Labour, Corporate Laws Advisor
From India, Agra
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