Dear All,
I would like to know the answers to the following questions relating to Salary Structure. Please help us out in this regard.
  1. What is Gross Salary?
  2. What is Net Salary?
  3. What are the mandatory components to be included in the salary structure?
  4. What are the components that are/can be incorporated in the salary strucutre for the tax benefit of the employees?
  5. What categories are the components classified into?
  6. Can the employer contribution towards PF, ESI and Gratuity etc be shown in the CTC?
  7. What should be the % split up of the components as per law?

From India , Delhi
1 & 2. In your pay slip the total of your earnings are 'Gross Salary' and the amount credited to your account after deductions , if any, is Net Salary.

3. Basic and DA are the 2 mandatory components to be included in the salary structure. This is as per the MW Act and may be referred to for details. However, many companies club this together and make it with in minimum wages and call it only Basic.

4. House Rent Allowance , Conveyance , Medical reimbursement , Food coupons , Gift vouchers ( check taxability)in general. You may refer to any IT ready reckoner for more details.

5. There are other components , mostly allowances , which are taxable which the company decides according to its structure.

6. These are all cost to the employer hence included in CTC calculation.

7. There is no definite rule for the split up but subject to MW Act. Normally companies give certain %age of Basic salary as HRA ( 35 - 60). However the total split up differs from company to company.

Hope your query is clarified to certain extent.

Thanks & Regds,

V G Venugopal.

From India , Tumkur
1. Gross Salary is the sum of all allownces and benefit which are offerd by your employer.
2.Net Salary is the amount after dedcution of some items like Income tax, PF, Loans and other.
3.Basic Salary
4. Medical Allownce, House Rent Allownce, Conveyance Allownce and Utility Allownce.
5.Depands on company policy.
6. all parts of total employee cost.
7. allownce does not grater the 50 % of Basic Salary.

From Pakistan , Karachi
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From India , Delhi

Here are some suggestions for your quieries;
1& 2. All the components of the Salary are known as Gross salary. The salary you are going to get after allowable deductions (statutory and others) is known as net salary(Which comes to ur packet or goes to bank:))
3.Normally Basic, DA and HRA is included statutorily. (even this true in cases of minimum wages act)
These components vary from industry to industry, state to state, etc. But normal components are Basic, DA, HRA(House Rent Allowance), CCA (City Compensatory Allowance, Conveyance,
The DA may fixed or variable. The variable depnds upon so many factors. Normally variable DA is given to workmen, who are controlled by the trade unions.
these are monthly components. The annual components are LTA (Leave Travel Allowance, Medical, Insurance etc)
4. Normally All components are taxable, except Conveyance, Medical, LTA for every block of two years. Uniform allowance is one more component which is not taxable
5.I don't understand this point, can u pl specify
6.Normally It has become a practice to include all the components whether direct or indirect to include in CTC. (This CTC is gross salary, what you actually get is net salary.
7.Normal accepted practice is 1/3 is basic and the remaining 2/3 is with respect to other components

hope this will suffice. Pl write to on clarification on particular points
write to me directly

From India , Bangalore
hi here ia an enclosed doc of salary calaculation of all with tax calculation. Regards Waqas Mehboob
From Pakistan , Lahore

Attached Files (Download Requires Membership)
File Type: doc Example of Salary Calculation.doc (56.0 KB, 1977 views)

Gross salary is the one which comprises all the allowenses and other components inclusive, nett is after deducting the mandatory deductions.
Gross Salary
Basic Salary
Other Allowances viz: PF, Medical
Nett Salary
Basic Salary
Less: PF , ESI, and any other allowaces medical
It all depends on the company structure which frames from time to time also.
Basically this is the stucture which evey one follows in India.
Gnana Prakash:smile:

From India , Madras
Pls find attached the tax caculator for 2009 and the general salary structure. This is a free software downloaded by me from net. Hope this helps you in some way. My mail id is .
From India , Hyderabad

Attached Files (Download Requires Membership)
File Type: xls TaxCalc_2009.xls (189.0 KB, 513 views)

What should be the best breakup for a person with gross of 1.20 lacs/month Where tax deducted is the least Posted via Mobile Device
From India , Bangalore

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