What Are The General Components Of Salary In India?

salil_ptn

Hi,
In to-day's business environment, the business performance plays a vital role in very existence of the word "Employee" and based on this performance - the salaray components should be defined. In our establishment, this component plays a vital role. So, we pay 60% of pay package as variable and 40% as fixed. The Fixed component is distributed in Basic,DA,Special allowance,House Rent Allowance. The variable components are Performance Linked Pay(linked with production volume & monthly profitability) & Productivity Linked Pay(linked with production volume only.
I believe, this is the best possible combination of a manufacturing industry.
regards
srp
10th November 2006 From India, Gurgaon

yajeethehr

I remember if the employee submits bills for the amount claimed against conveyance allowance (reimbursement), then the same can be claimed for tax deduction. Also, for lunch allowance, we can give food vouchers / food coupons to allow for tax deduction for that amount.
Regards,
Samba.

10th November 2006 From India, Hyderabad

salil_ptn

Dear all
We know that contribution of PF is applicable on leave encashment,leave availed by an employee during the tenure of his service. But what about the unavailed leave wages/salary paid to a separated employee on his final settlement ??
Please make me uderstand the logic and the rules under EPF & MP Act, if any.
regards
srp
10th November 2006 From India, Gurgaon

phanihr

Hi, Could you pls help in what is the max amout in thes components. I hope good ending from your side. Regards, P.S.Phani.
11th November 2006 From India, Bangalore

salil_ptn

Hi !
The percentage is fixed. However, there is no limit for the right employee in the right position. As I spoke, Performance is the only yardstick- I mean both individual & corporate. For an exceptional performer sky is the limit.
Hope you understood my points.
Thnx
11th November 2006 From India, Gurgaon

punitapsc

Ashish,
Would be thankful if you are able to share the concrete information after your meting with CA as i am also in the process of re structuring the salary structure in my organization.
Thanks
Punita
28th November 2006

Dova

what are the components of salary in a non profit organization in India? What is the salary administration structure for non profit organization?
4th January 2007 From India, Hyderabad

Samyuktha

hi,,, im doin my final yr project. i hav plans of doin a proj in compensation.. can anyone suggest some good topics in this area.. the duration is 4 months... thank u :) regards, samyuktha
4th January 2007 From India, Madras

nehabagga

Hi All,

Let me try and give you an idea about components of salary

1) Basic - 35 to 40 % 0f gross (taxable)

2) HRA - 40% of basic ( incase of metro cities 50% of basic) ( exempted from tax incase the employee gives rent receipt at 10% of gross annual income or as defined in salary and as per receipts produced)

3) conveyance = 800 per month (800* 12 = 9600 p.a.) (exempted from tax)

4) Medical Reimbursement = 1250 per month ( 1250* 12= 15000 p.a.)(exempted from taxable income)

5) LTA = 1250 per month (1250* 12 - 15000 p.a.)(can be exempted from tax twice in block of 4 years)

6) Meal allowance (cannoned be more than 65Rs per day so 16250 p.a. if 250 days working.

You can put the remaining amount in Special Allowance ( whole of it is taxable) or account for in other allowances such as uniform allowance ( upto 10,000 p.a.)(not taxable), Internet access allowance, phone allowance, professional enrichment allowance,entertainment allowance, City compensatory allowance(20% of basic)(Taxable) etc.

Then in case there is PF deduction:

1)Employers contribution of PF = 12% of basic + DA( 8.33% in FPF (family pension fund) + 3.67% in EPF)

2) Employees contribution in PF = 12% of basic +DA (all in EPF)

In case the gross salary of the employee is less than 10000 then he comes under ESI. Incase ESI is applicable in the organization then

1) Employee contribution to ESI = 1.75% of salary

2) employers contribution in ESI= 4.75 % of salary

tax slabs

0 - 1,00,000 = 0%

1,00,001 - 1,50,000 = 10 %

150,001 - 2, 50,000 = 20%

2,50,001 onwards = 30%

Neha :)
26th February 2007 From India, Chandigarh

KUMAR.R.

hi all! What are taxable benefits and no taxable.please break up components TAXABLE-NON TAXABLE yours kumar
26th February 2007 From India, Hyderabad

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