Salary Breakup-clear Explanation Please - XLS Download

Hi All,
I am working for the garment retail industry. I m a new kid on the floor. I need your help in understanding the salary break up.
i hv a prob in understanding the salary break up, like, do v hv any % for the DA, HRA, CA, Special allowance, conveyance, other allowances. Is it calculated by % or by any specific amount.
What are the contents of the salary break-up? Does the break up differ from mgt to mgt? plz do help me?
Thanks and Regards,
Sriram V B

Hi Sriram,
Greetings,
The basic is to be calculated @40% on CTC.
HRA is to be calculated @40% of basic salary
Medical Allowance is fixed @1250
Special Allowacw will be the balance rem.
Also you have to deduct [Login to view] of basic Salary
Professional Tax as applies.
This is the basic information.
Cheers
Geetanjali

Hi Geetanjali,
Greetings,
Firstly, i wud liked to thank u 4 ur reply.

My co. calculates in a diff manner, like, i dont think v calculate on any %'s.

i think the break-up differs mgt to mgt. lots of difference in wat % u hv given to me.

I hv some other questions, which is the below break-up is as per Tamil Nadu:-
(1) Basic Pay - 2500 and above, HRA will be taken into account
(2) Basic Pay - < 2500, DA will be taken into account.
(3) Conveyance, special allowances and other allowances, etc... comes below those above as per the % (% is my question)
(4) Deductions PF, ESI, PT as per the law.
(5) Mediclaim, max is 1250, min any amount. (deduction 4 months in a year)
(6) Holiday Allowances as per the holidays allowed in FORM V
Does the % differ from company to company or the same as per the govt law.
AM I CORRECT OR ANY MISTAKES IN THE ABOVE
Do correct me if i hv gone wrong in any place
Thanks and Regards,
Sriram V B

Hi Everyone
Can you please help me, i am working in a staffing company and looking for a salary structure where i can divide more on incentive based.
Can you please help.
Thanks

can any one tell me whether both DA & HRA can be incorporated in the salary stucture ? If yes then what max % is allowed, if no then let me know the exact way to bifurcate both..
Regards
Sangeeta

Hi Sriram,
As u requested, Plz find below the salary break up
Basic : 30% 50% of CTC (Cost to Company)
HRA : 50% of Basic for Major Cities (i.e) Chennai, Delhi, Mumabi & Kolkata
40% of Basic for all other locations
Dearness Allowances (D.A) : Most company will not have which is alloted by the governement and this amount is fully taxable
Transport Allowance : Till Rs.800/- (per month) is not taxable
Telephone Allowance : Completely taxable
Deputation Allowance : Completely taxable
Provident Fund : 12% of BAsic
Gratuity : 4.8% of Basic (Employees who worked in an organisation for minimum 5 yrs are eligible for the same)
Hope the above details if calrify some of ur doubts
Best Regards
Isaac Patturaja
9444637384

Dear Friends
Might be it is helpfull to you all
Pls Note:
1.) For every Cash component paid to employee Employer has to bear FBT Cost
2.) Any kind of Reimbursement should be part of CTC
3.) Some Co. also include Performace Pay Bonus as part of CTC
For any detail you can mail me
Regards
Nikhil Kumar

Hi

Sriram,

First thing you should understand that there is no such thing as fixed pattern of salary, it changes from company to company.

The illustration given by Geetanjali is one way of fixing up a salary structure.

One way which is normally followed in the organisation is

Basic Pay: There is scale for basic pay as per level / designation say Rs.X
Dearness Allowance: Normally seen in salary structure of Govt Orgs, Its calculated based on Consumer Price Index
HRA: It depends on Basic Pay, varies from 20-50 % of basic pay
CCA: Again one of the rarely seen component. Depends on company policy
Conveyance / Transport Allowance: varies, allowance upto rs. 800 per month is tax exempt
Medical: Normally Rs.1250 per month or some companies gives on yearly basis Rs.15000 which is tax exempt, reimbursement on proof is possible
Special Allowance: Some time when you hire a employee from outside just to match CTC with negotiated figure, which if not possible to get because of some restrictions like limit of basic pay for given designation, it is adjusted in this allowance. Can be named under any allowance like Professional Support Allowance / Development Allowance etc.

Deductions
PF: 12 % of basic
Gratuity 4.81 % of basic
Superannuation
etc

So when you say
(1) Basic Pay - 2500 and above, HRA will be taken into account
(2) Basic Pay - < 2500, DA will be taken into account.
Its entirely company policy and you need to understand from your company person.

Salary structure may change from Management to Management as percentage of some allowances may change according to level for example if there is allowance called Mobile Bill reimbursement it may change.

Renu

When you design a CTC structure which is incentive based. Some percentage of CTC is kept as performance based incentive. Percentage of this incentive increases as level is increased.

Normally at entry level / junior level incentive is 10-15 % of CTC
Middle level 20-30 % CTC
Senior level 20-45 % CTC
Some times for president / COO / CEO / MD level incentive can be as high as 50-60 % of CTC
There can be different type of incentives

• Individual performance
• Group Performance
• Company performance

Some formula may be worked out to decide exact calculation

Sangeeta

Both DA and HRA can be part of Salary as functionality is different and they are no way interrelated. So refer my earlier comments.

Calculation of DA

There will be something called of Base CPI taken at some reference point
And there will be current average CPI at given quarter

DA is % of Basic salary and this percentage is calculated as

DA % = % increase over base CPI

For ex
Current Avg CPI is 3150
Base CPI is 1708
Then % increase is 84.4 %

So DA will be 84.4 % of basic pay


Regards,
Sushil Patil

Thanks for the info friends. I've a doubt. Is there any legislation(s) regarding the salary break up % other than the Minimum wages?
Pls Let me Know.
Thank you.
Kumanan. A

I am giving salary structure details as per my knowledge and indutry practice.1) Your basic is not less than minimum basic fixed by Govt.2) If there is worker then you have to pay DA with basic3) Generaly it depends upon company policy but standard practice is to keep basic is 40-60 percent on ctc.4) As per govt rule you have to pay min HRA is 5% on basic and DA.5) other allowances you can fixed as per your requirements but not more than basic for good visual look.Generally it is assume that more basic means good company. thanksPankaj