what is beneficial for employees,to provide with superannuation benifits or give the amount as part of the salary?
From India, Mumbai
From India, Mumbai
Dear Zupin, Had you understood the concept of superannuation benefits in its proper perspective, this question would not have arisen at all.
From India, Salem
6108From India, Salem
Dear Sir,
My question pertains to my observation regarding certain employers who withhold a portion of the salaries of employees earning a monthly income of barely 18-20k. Please note that superannuation is included in the CTC. This issue does not arise for high-salaried employees.
Is it beneficial to block this money or offer a higher take-home salary instead?
Regards, Zubin.
From India, Mumbai
My question pertains to my observation regarding certain employers who withhold a portion of the salaries of employees earning a monthly income of barely 18-20k. Please note that superannuation is included in the CTC. This issue does not arise for high-salaried employees.
Is it beneficial to block this money or offer a higher take-home salary instead?
Regards, Zubin.
From India, Mumbai
Dear Zubin,
The tone of your original question would certainly compel a retired senior citizen like me, living as independently and happily as before, to give such an answer only. Now, your further questions substantiate my answer statement for the simple reason that the concept of CTC, which is in vogue in certain countries like India and some countries in the African continent, is primarily to woo job-seekers.
Time and again, the concept of "C.T.C" has been explained in this forum and categorically stated by many members that all the components represented in the CTC do not form part of the take-home salary of the employee. CTC is only a mere projected value of the overall expenses incurred by the employer per employee in a year. "Superannuation" in the realm of employment is a future event contingent upon normal termination of employment on reaching a particular age fixed in the contract of employment by the employee, coupled with the completion of a minimum period of service. It may comprise a one-time lump sum payment called gratuity at the time of termination and/or a periodical payment like pension after termination. The employer has to create a fund for this purpose and contribute to such a future fund every year in respect of the employee on an actuarial basis. Therefore, it is an inevitable current expense incurred by the employer and therefore chargeable to the cost of employment.
Coming again to the point of the right understanding of the concept of wages/salary/remuneration payable to a prospective employee in the salary negotiation stage, though he may be wooed by the employer with the grandeur and enormity of CTC, the employee should be more vigilant about what would come to his hand every month only. The employee should not forget that the monthly salary coming to his hand is the actual value of his current employability and the others projected in the CTC are both statutory fringe benefits as well as incentivizing his retention in the long run.
From India, Salem
The tone of your original question would certainly compel a retired senior citizen like me, living as independently and happily as before, to give such an answer only. Now, your further questions substantiate my answer statement for the simple reason that the concept of CTC, which is in vogue in certain countries like India and some countries in the African continent, is primarily to woo job-seekers.
Time and again, the concept of "C.T.C" has been explained in this forum and categorically stated by many members that all the components represented in the CTC do not form part of the take-home salary of the employee. CTC is only a mere projected value of the overall expenses incurred by the employer per employee in a year. "Superannuation" in the realm of employment is a future event contingent upon normal termination of employment on reaching a particular age fixed in the contract of employment by the employee, coupled with the completion of a minimum period of service. It may comprise a one-time lump sum payment called gratuity at the time of termination and/or a periodical payment like pension after termination. The employer has to create a fund for this purpose and contribute to such a future fund every year in respect of the employee on an actuarial basis. Therefore, it is an inevitable current expense incurred by the employer and therefore chargeable to the cost of employment.
Coming again to the point of the right understanding of the concept of wages/salary/remuneration payable to a prospective employee in the salary negotiation stage, though he may be wooed by the employer with the grandeur and enormity of CTC, the employee should be more vigilant about what would come to his hand every month only. The employee should not forget that the monthly salary coming to his hand is the actual value of his current employability and the others projected in the CTC are both statutory fringe benefits as well as incentivizing his retention in the long run.
From India, Salem
CTC means Cost to Company. It does not mean what you will get as take-home pay or net pay. PF paid by the company is shown in CTC, but this amount will only be received upon retirement or exit from the company, and if it is not transferred to a new PF account (conditions apply). Certain deductions, like the employee's share of PF, are meant to encourage savings for the future. Remember, Warren Buffett says to spend after saving first, not save after spending. If the employee's share of PF is not deducted, take-home pay will undoubtedly increase, but it will likely be spent. The government, in its wisdom, emphasizes the importance of savings for the future and therefore mandates PF deductions. It is essential to grasp the basic concepts of CTC, EPF, ESIC, etc., as this will aid in understanding and saving for rainy days. Building a retirement corpus is crucial as everyone grows old and retires. While living in the present is important, having a keen eye on the future is equally necessary.
From India, Pune
From India, Pune
Dear Mr. Zubin,
The dictionary meaning of superannuation is "Send into retirement with a pension." Normally, superannuation benefits are extended to executive and managerial cadre. The company will form a Superannuation Trust, take a policy with an insurance company, and pay the premium annually.
I have been receiving my superannuation pension regularly from my previous employment. One-third of the amount was refunded immediately after relieving from service. Besides, a lump sum of money will be paid to the nominee after the death of the member. Please remember the tagline of LIC:
"Zindagike saath bhi, Zindagike baad bhi."
From India, New Delhi
The dictionary meaning of superannuation is "Send into retirement with a pension." Normally, superannuation benefits are extended to executive and managerial cadre. The company will form a Superannuation Trust, take a policy with an insurance company, and pay the premium annually.
I have been receiving my superannuation pension regularly from my previous employment. One-third of the amount was refunded immediately after relieving from service. Besides, a lump sum of money will be paid to the nominee after the death of the member. Please remember the tagline of LIC:
"Zindagike saath bhi, Zindagike baad bhi."
From India, New Delhi
Mr. Zubin,
I want to add to my earlier comment. A company pays its staff as per market standards, skills, and financial position. All companies normally work on a going concern basis and work with an eye to the future. All well-run companies with a successful business model do some planning for employee benefits in the present and plan for retirement/superannuation benefits. Insurance policies, PF funds, and Gratuity are all ways to reward employees for service and are paid on exit or retirement, etc.
Just to increase pay in hand presently, no tweaking is possible in such benefits, most of which are mandated by law. So if you want to give more cash in hand to employees, consider a pay revision in a planned manner, taking revenue inflow into account among other factors that influence your business or product.
From India, Pune
I want to add to my earlier comment. A company pays its staff as per market standards, skills, and financial position. All companies normally work on a going concern basis and work with an eye to the future. All well-run companies with a successful business model do some planning for employee benefits in the present and plan for retirement/superannuation benefits. Insurance policies, PF funds, and Gratuity are all ways to reward employees for service and are paid on exit or retirement, etc.
Just to increase pay in hand presently, no tweaking is possible in such benefits, most of which are mandated by law. So if you want to give more cash in hand to employees, consider a pay revision in a planned manner, taking revenue inflow into account among other factors that influence your business or product.
From India, Pune
Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.