Dear Seniors,
Recently i have joined new company, its an electronic company.before i joined they were having there own policy of compensation and benifits.now i have been ask to design new hr mannual. i have to desing everything, i am facing too much problem in designing the compensation policy. beacuse they dont have a proper way of providing the salary.means they provide the salary and the deduction as per the CTC.
SO NOW HOW CAN I DESING THE COMPENSATION POLICY.CAN ANYBODY HELP ME IN DESIGNING THE POLICY.THE POINTS WHICH I WANT TO INCLUDE IN THE POLICY ARE
1) WE PROVIDE SALARY ON 10 OF EVERY MONTH IN SALARY ACCOUNT.
WE PROVIDE HALF YEARLY ALLOWANCE :- MEDICAL ALLOWANCE
BAGUAGE ALLOWANCE
EDUCATION ALLOWANCE
UNIFORM ALLOWANCE
AND LEAVE ENCASHMENT AT THE END OF YEAR.
Awaiting your reply
Swati Devnani
HR Executive.:?::?:
From India, Vadodara
Recently i have joined new company, its an electronic company.before i joined they were having there own policy of compensation and benifits.now i have been ask to design new hr mannual. i have to desing everything, i am facing too much problem in designing the compensation policy. beacuse they dont have a proper way of providing the salary.means they provide the salary and the deduction as per the CTC.
SO NOW HOW CAN I DESING THE COMPENSATION POLICY.CAN ANYBODY HELP ME IN DESIGNING THE POLICY.THE POINTS WHICH I WANT TO INCLUDE IN THE POLICY ARE
1) WE PROVIDE SALARY ON 10 OF EVERY MONTH IN SALARY ACCOUNT.
WE PROVIDE HALF YEARLY ALLOWANCE :- MEDICAL ALLOWANCE
BAGUAGE ALLOWANCE
EDUCATION ALLOWANCE
UNIFORM ALLOWANCE
AND LEAVE ENCASHMENT AT THE END OF YEAR.
Awaiting your reply
Swati Devnani
HR Executive.:?::?:
From India, Vadodara
Hi Swati,
I think u r very fresher to the industry, I will list out, even though u take help from you finance person too.
First of all HR should be care taker for the employees. when u are u preparing the compensation, u have to very careful abt the taxes.
When u are framing the salary structure, more amount of taxes should not be made. U have to consider employee benificiary side.
You should not say medical allowance - its medical reimbursement. when u r saying allowance it is taxable. so u can give reimbursement of medical even fifty, but govt. will givethe exemption upto 15k per year. that also bill should be produced.
educational allowance also taxable. but exemption for child education that also per norms.
there is no uniform allowance. if u are giving that also taxable income. so company can provide uniform and this expenses should be consider under FBT for the company. then there is no tax for employee.
As per satutory complainces, there should be a earned leave. ie EL, after 20 working days 1 day will work off. if they work on the same day, this days will be calculated at the end of the year totally, b4 u issuing the amount u have to consider whether it falls in taxable or not? if else then consider which slab is it?....
employee welfare comes under FBT. like uniform, insurance policy, transports for employee, food, (except sodexo), mobile bill of employee, petrol allowance of employee car etc. some of this called as perks or perquisites . so company have to pay the tax.
so i request you to biforcate like
1.Basic,
2.HRA,(if receipt provided, tax excemption)
3.Medical Reimbursement. (tax excemption , if bill provided.)
4Conveyance(9800Rs, dont want bill, but excemption)
5.Book and periodics(But taxable)
6.Special allowance(Taxable)
7.LTA(twice in four year with bill, tax excemption)
more that that u need to give any allowance as per ur company policy are taxable, but u can biforcate in the same also.
from CTC u delete the Employee contribution to PF, PT contribution of employee. to prepare the taxable income. and insurance premium,medical premium,FD,PPF by employee upto one lakh under 80C. then u prepare TDS.
any queries, mail me at
From India, Bangalore
2I think u r very fresher to the industry, I will list out, even though u take help from you finance person too.
First of all HR should be care taker for the employees. when u are u preparing the compensation, u have to very careful abt the taxes.
When u are framing the salary structure, more amount of taxes should not be made. U have to consider employee benificiary side.
You should not say medical allowance - its medical reimbursement. when u r saying allowance it is taxable. so u can give reimbursement of medical even fifty, but govt. will givethe exemption upto 15k per year. that also bill should be produced.
educational allowance also taxable. but exemption for child education that also per norms.
there is no uniform allowance. if u are giving that also taxable income. so company can provide uniform and this expenses should be consider under FBT for the company. then there is no tax for employee.
As per satutory complainces, there should be a earned leave. ie EL, after 20 working days 1 day will work off. if they work on the same day, this days will be calculated at the end of the year totally, b4 u issuing the amount u have to consider whether it falls in taxable or not? if else then consider which slab is it?....
employee welfare comes under FBT. like uniform, insurance policy, transports for employee, food, (except sodexo), mobile bill of employee, petrol allowance of employee car etc. some of this called as perks or perquisites . so company have to pay the tax.
so i request you to biforcate like
1.Basic,
2.HRA,(if receipt provided, tax excemption)
3.Medical Reimbursement. (tax excemption , if bill provided.)
4Conveyance(9800Rs, dont want bill, but excemption)
5.Book and periodics(But taxable)
6.Special allowance(Taxable)
7.LTA(twice in four year with bill, tax excemption)
more that that u need to give any allowance as per ur company policy are taxable, but u can biforcate in the same also.
from CTC u delete the Employee contribution to PF, PT contribution of employee. to prepare the taxable income. and insurance premium,medical premium,FD,PPF by employee upto one lakh under 80C. then u prepare TDS.
any queries, mail me at
From India, Bangalore
Hi Visakha
Its a really good inforamtion you have shared !! infect many of us who work in HR but do not have depth ...
Can you suggest me some books or site who can give us in detail info on compansation .. in terms of Components in Structure. flexibality of structure .. how can we make structure non taxable or taxable income in structure ..Rules for the same ETC
My email id is
:) bhakti
From India, Mumbai
Its a really good inforamtion you have shared !! infect many of us who work in HR but do not have depth ...
Can you suggest me some books or site who can give us in detail info on compansation .. in terms of Components in Structure. flexibality of structure .. how can we make structure non taxable or taxable income in structure ..Rules for the same ETC
My email id is
:) bhakti
From India, Mumbai
Hi Bhakti,
You can refer the book Income Tax Ready Reckener by VG Mehta, and salaries compensation, taxation but both will give the law very simple but you have to compare the salary structures of various company and takethe conclusion...
and which state u belonging to....
after a week i will send u some data on the same. bcoz its have to type.... this week i m fully packed...
All the best...
From India, Bangalore
You can refer the book Income Tax Ready Reckener by VG Mehta, and salaries compensation, taxation but both will give the law very simple but you have to compare the salary structures of various company and takethe conclusion...
and which state u belonging to....
after a week i will send u some data on the same. bcoz its have to type.... this week i m fully packed...
All the best...
From India, Bangalore
Hi Vishakha
thanks vishakha , i belongs to maharashtra ..
Vishakha i have done that !!! but many companies allows new joinee to designe their componsation structure or its flexible..
How one can designe such structure ..what are fix and Flexible components in salary structure and which are taxable and non taxable part of salary sheet
Bhakti
From India, Mumbai
thanks vishakha , i belongs to maharashtra ..
Vishakha i have done that !!! but many companies allows new joinee to designe their componsation structure or its flexible..
How one can designe such structure ..what are fix and Flexible components in salary structure and which are taxable and non taxable part of salary sheet
Bhakti
From India, Mumbai
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Compensation policy.doc
COMPENSATION POLICY(Bilingua l)_v 1.1.pdf