Hi dear HR professionals, Could anyone please clarify a basic break up of the CTC structure with PF included? The articles I am reading are all from 10 years ago. Thanks in advance.
From India, Thane
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From India, Thane
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Let me help you develop a CTC structure with PF included. Let us assume the CTC for an employee is 3 lakh per annum, which includes Basic - 10,000/- per month, HRA, CONV, Monthly gross - 20,000/- per month, Employer's portion of PF & ESI, Statutory Bonus as per Act, LTA - 20,000/- per annum, Mediclaim Insurance Premium - 3500/- per year, Group Personal Accident Insurance 1000 per annum. Employer's PF Contribution - @12% of 10,000/- = 1200/- per month, ESI Employer's Contribution - @3.25% of 20,000/- = 650/- per month. Statutory Bonus on the basis of minimum wages 8.33%, say 10,000/- per year. The total non-payable amount to the employee - 3500 + 1000 + 650 x 12 + 10,000 = 27,450/- per year. Therefore, the total amount payable to the employee - 3,00,000 - 27,450 = 2,72,550/- per year. Now 50% of this allowance = 50% of 2,72,550/- = 136,375/- per year, and Basic is also 136,375/- per year. Therefore, the new monthly Basic will be 1,36,375 / 12 = 11,360/- (Rounded off). The new PF Employer's contribution will be @12% of 11,360/- = 1363/- per month. Therefore, the total allowances (monthly and yearly) 11,360 - 1363 - 10,000/12 - 20,000/12 = 7497/- per month should be divided among HRA, CONV & any other yearly items.
If we make a back calculation, it will be Basic - 11,360/- per month (1,36,320/- yearly), HRA, CONV & any other yearly Allowance 7497/- (89,964/- yearly), LTA - 20,000/- yearly, Bonus - 10,000/- yearly, Insurance Premiums including ESI - 27,450/- yearly, PF Employer's contribution - 1363/- x 12 = 16,356/- yearly. Therefore, yearly CTC = 1,36,320 + 89,964 + 20,000 + 10,000 + 27,450 + 16,356 = 3,00,090/-. An extra 90/- may be paid or adjusted against any allowances or against less Employer's contribution to ESI for less monthly gross.
All the above calculations are made based on Wage codes "Wage" definition expected to be implemented from 01.04.2021.
S K Bandyopadhyay (Howrah, WB)
From India, New Delhi
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409If we make a back calculation, it will be Basic - 11,360/- per month (1,36,320/- yearly), HRA, CONV & any other yearly Allowance 7497/- (89,964/- yearly), LTA - 20,000/- yearly, Bonus - 10,000/- yearly, Insurance Premiums including ESI - 27,450/- yearly, PF Employer's contribution - 1363/- x 12 = 16,356/- yearly. Therefore, yearly CTC = 1,36,320 + 89,964 + 20,000 + 10,000 + 27,450 + 16,356 = 3,00,090/-. An extra 90/- may be paid or adjusted against any allowances or against less Employer's contribution to ESI for less monthly gross.
All the above calculations are made based on Wage codes "Wage" definition expected to be implemented from 01.04.2021.
S K Bandyopadhyay (Howrah, WB)
From India, New Delhi
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PF - TAKE HOME SALARY REDUCE NOW.pdf
Salary-Note.doc