Basic Salary - Basic Salary Percentage [Thread 30509]

What is the split up of CTC? Can anybody help me with how much percentage should be given?

Hi Divya,

The contents of the salary breakup are as below; you can prepare it according to your own suitability. HRA would be 50% or 60% of the basic salary.

Basic
HRA
TA
Other Allowance
Mobile Reimbursement / Month
Gross Per Month = Sum of all the above.
Gross Per Annum = 12*Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who is not covered under ESI as the maximum ceiling for ESI is 10000/Month. Getting more than this will be covered under Mediclaim or it depends on the company policy.
Ex-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESI
Annual total cost is also called CTC.

Hope it is clear now. If you have any queries, feel free to ask.

Regards,
Amit Seth.

How its Ex gratia calculated?
What is employer's contribution in PF
I got the following chart from somewhere. Can you please explain this?
Rates of Contribution
SCHEME EMPLOYEE’S EMPLOYER’S CENTRAL GOVT’S
Provident Fund
Scheme 12%
Amount > 8.33%
(in case where NIL
contribution is 12%
of 10%)
10% (in case of
certain
Establishments as
per details given
earlier)

Insurance
Scheme NIL 0.5 NIL
Pension Scheme NIL 8.33% (Diverted
out of Provident
Fund 1.16%
Regards,
Pranita

Hi Pranita,

Ex-Gratia is a fixed amount that is added in the CTC as a bonus. It's a part of CTC and varies for employees at different levels, i.e., it is higher for high-level employees and lower for low-level employees. It is almost equal to two months' basic salary.

Regarding PF, 12% of the basic salary is contributed from both sides, i.e., 12% from the employee and 12% from the employer. So, the total contribution is 12% + 12% = 24%. Out of this 24%, 12% of the employee's contribution goes to the Provident Fund, 3.67% of the employer's contribution goes to the Provident Fund, and the remaining 8.33% of the employer's contribution is remitted to the Pension Fund.

The maximum ceiling for PF contribution is 6500/- of the basic salary. If any existing member exceeds this amount, they can still be a member of the fund, but the maximum contribution will be calculated based on 6500/- only.

I hope it is clearer now. If you still have any queries, feel free to revert.

Regards,
Amit Seth.

Some confusion is still left, i.e. what is the Employees' Deposit Linked Insurance Scheme, in which the contribution is 0.5%? Are there any inspection charges and administrative charges that the employer has to pay? Are these included in the 12% share of the employer? If the basic wage is more than Rs. 6500, then do these also have to be paid at the same percentage?

Regards, Pranita

Hi Pranita,

Employee's Deposit Linked Insurance Scheme is a plan where the employer contributes 0.5% of the basic pay of employees. It is generally done for all the employees covered under the Provident Fund.

The benefit of this scheme is that if any member dies while in service, an amount equal to the average balance in their Provident Fund account during the period of membership is paid to the eligible member of their family. However, if the average balance exceeds Rs. 35,000, the amount payable shall be Rs. 35,000 plus 25% of the excess amount, with a maximum ceiling of Rs. 60,000.

Yes, the employer has to pay 0.18% of the basic pay as inspection charges, 1.10% of the employees' wages as administrative charges for the Provident Fund, and 0.01% of the employees' wages for the administration of the Deposit Linked Insurance Fund.

These are the extra charges that the employer has to pay, apart from the 12%.

If the employee is still a member of the Fund, then the employer definitely has to pay the same amount for the administration of their accounts as well.

I hope it is clear now.

Regards,

Amit Seth.

Dear Amit,

From this column, please solve my problem. All the benefits and contributions are calculated based on the basic salary. Is there any particular format or formula to calculate the basic salary?

Warm Regards, Fahim Khan