Gross & Ctc Calculation Advice Required - XLS Download

Binsy Jobi
abc

Corrected:
ABC

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If you have any further questions or need additional assistance, please feel free to ask.
amit_goyal_2002
Hi Bincy,

Your salary will be calculated as follows:
- BASIC: 6525
- HRA: 600
- CONV: 500
- SPL ALL: 619

GROSS: 8244
- ESI (Employer's Share): 392
- PF (Employer's Share): 780
- GRATUITY: 272
- CTC: 9688
- NET (TAKE HOME): 7219.73

A working sheet is attached for your understanding.

Amit Goyal
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amit_goyal_2002
Hi Binsy,

Please find the attachment where your salary is restructured to achieve a Take-Home of Rs. 8,000 per month.

Amit Goyal
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amit_goyal_2002
Dear Binsy,

As far as HRA, Conv, and special allowance are concerned, these are company-specific. So, you can't argue over these components, and hence, whatever your company is providing is acceptable. However, PF, ESI, and gratuity are not company-specific, and there are fixed rates to be followed. In the calculation you provided, the employer added 13.61% as PF in the CTC when it should be 12% because only 12% can be withdrawn by the employee. The remaining 1.61% comprises administrative charges and EDLIS contribution by the employer. Therefore, only 12% of basic and DA should be included when calculating CTC. The ESI calculation is accurate, but the gratuity calculation is incorrect as gratuity is calculated at 4.16% of basic and DA, while your employer is calculating it at 4.82%. The bonus calculation is correct. You need to request your employer to calculate gratuity at 4.16% and PF at 12% when determining the CTC.

The logic behind the 4.16% for gratuity is as follows:

Gratuity is payable only after 5 years or 60 months, with 15 days' salary paid for every completed year. This means that in 5 years, 2.5 months' salary is payable (only basic and DA), or in 60 months, 2.5 months' salary is payable. Now, calculate how much percentage 2.5 is of 60 as follows:

2.5 x 100 / 60

= 4.16

Hence, gratuity is payable at 4.16% of basic and DA.

Amit Goyal
amit_goyal_2002
Hi,

I recalculated the gratuity percentage, and what I found is that gratuity should be calculated at 4.83% instead of 4.16%. This adjustment is necessary because the calculation assumes the month consists of 26 working days rather than 30. Given that 15 days of basic and DA are provided, it implies that 57.69% of the monthly basic and DA is given for each completed year. This translates to 0.58 months of basic and DA for every year, or 0.58 times 5 months of basic and DA for 5 years, totaling 2.9 months of basic and DA. Now, let's calculate what percentage 2.9 is of 60 (12 times 5)...

2.9 x 100 / 60 = 4.83%

I apologize for the incorrect calculation earlier.

Amit Goyal
CJyoti
Can anyone please reply to me regarding whether ESI should be included in CTC or not? If yes, then whose share should we mention in CTC - the employer's or the employee's?

JAC
rekhakrishna
Hi,

I am working for a new upcoming hospital with multispecialties. Employees are questioning why PF and Gratuity are being deducted in CTC. I need to know how the company benefits from this calculation. Also, I need to understand the differences between the employee and employer.

Regards, Rekha Krishna
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