I have recently joined a small software company. While negotiating the salary, the figure quoted to me was Rs.15,000/- per month. When asked what I wanted my "take home" to be, I asked for the maximum. So, after all possible deductions, the "take home" figure given to me was Rs.14,200/-.
However, I was in for a shock when my first pay check came. My "take home" was not Rs.14,200/- but Rs.13,320/-. When confronted, the HR personnel just shrugged his shoulders and said that my salary structure had clearly been mentioned in my appointment letter.
My salary structure in my appointment letter looks exactly as follows:
Basic 7000.00
HRA 2960.00
Medical Allowance 1800.00
Education Allowance 800.00
Travel Allowance 800.00
Lunch Allowance 800.00
P.F. Component Paid
By Company 840.00
CTC (Rs.) 15000.00
So it is evident that PF is being deducted twice from my salary.
Is it legal to quote only CTC in the appointment letter instead of the actual salary in the salary structure. Also is it legal to quote the company's contribution of provident fund in the salary structure as a part of the salary.
I have also signed a bond which requires me to stay in the company for at least 1 year. However, this bond is meant for a technical employee and it is worded in a way that it implies that the employee is a technical person. I am a non-technical employee in a non-technical department.
Can this bond be legally binding to me also?
I would really appreciate it if someone would advise me on these subject matters. This is the first time that I am facing issues like these.
Thanking you all in advance.
From India, Madras
However, I was in for a shock when my first pay check came. My "take home" was not Rs.14,200/- but Rs.13,320/-. When confronted, the HR personnel just shrugged his shoulders and said that my salary structure had clearly been mentioned in my appointment letter.
My salary structure in my appointment letter looks exactly as follows:
Basic 7000.00
HRA 2960.00
Medical Allowance 1800.00
Education Allowance 800.00
Travel Allowance 800.00
Lunch Allowance 800.00
P.F. Component Paid
By Company 840.00
CTC (Rs.) 15000.00
So it is evident that PF is being deducted twice from my salary.
Is it legal to quote only CTC in the appointment letter instead of the actual salary in the salary structure. Also is it legal to quote the company's contribution of provident fund in the salary structure as a part of the salary.
I have also signed a bond which requires me to stay in the company for at least 1 year. However, this bond is meant for a technical employee and it is worded in a way that it implies that the employee is a technical person. I am a non-technical employee in a non-technical department.
Can this bond be legally binding to me also?
I would really appreciate it if someone would advise me on these subject matters. This is the first time that I am facing issues like these.
Thanking you all in advance.
From India, Madras
41
NOTHING UR PF IS NOT BEING DEDUCTED TWICE . Companies include their contribution as a part of CTC.
Look it works like this:
Basic 7000.00 this u will get in payslip / salary
HRA 2960.00 this u will get in payslip / salary
Medical Allowance 1800.00 this u will get in payslip / salary
Education Allowance 800.00 this u will get in payslip / salary
Travel Allowance 800.00 this u will get in payslip / salary
Lunch Allowance 800.00 this u will get in payslip / salary
P.F. Component Paid
By Company 840.00 this u will not be paid monthly, but everymonth an amount of Rs.840 from company side + Rs.840 from your side, i.e from the above total of BASIC to LUNCH ALLOWANCE is deposited by company to PF OFFICE.
THIS U WILL GET WHEN U WITHDRAW PF,, SO everymonth an amount of 1680 Rs. is being deposited in PF office , in ur name, which u will get afterwards when u resign , transfer the PF.
So ur total take home monthly comes to
BASIC till LUNCH allowance - PF Rs.840 - ANy taxes if applicable (eg P.TAX)
= 14160 - 840 - other taxes / deductions
= 13320 Rs - other taxes / deductions is uR TAKE HOME PER MONTH ...
HOPE U GOT IT CLEAR NOW ;;;
:roll:
From India, Pune
Look it works like this:
Basic 7000.00 this u will get in payslip / salary
HRA 2960.00 this u will get in payslip / salary
Medical Allowance 1800.00 this u will get in payslip / salary
Education Allowance 800.00 this u will get in payslip / salary
Travel Allowance 800.00 this u will get in payslip / salary
Lunch Allowance 800.00 this u will get in payslip / salary
P.F. Component Paid
By Company 840.00 this u will not be paid monthly, but everymonth an amount of Rs.840 from company side + Rs.840 from your side, i.e from the above total of BASIC to LUNCH ALLOWANCE is deposited by company to PF OFFICE.
THIS U WILL GET WHEN U WITHDRAW PF,, SO everymonth an amount of 1680 Rs. is being deposited in PF office , in ur name, which u will get afterwards when u resign , transfer the PF.
So ur total take home monthly comes to
BASIC till LUNCH allowance - PF Rs.840 - ANy taxes if applicable (eg P.TAX)
= 14160 - 840 - other taxes / deductions
= 13320 Rs - other taxes / deductions is uR TAKE HOME PER MONTH ...
HOPE U GOT IT CLEAR NOW ;;;
:roll:
From India, Pune
Dear Radha,
Ravi has explained it very well. Always remember that CTC is cost to company i.e. the cost that the company is bearing due to the fact that it wants to avail your services for it.
Therefore there are some cost that the company has to bear for you either due to statutory requirement or as a gesture of rewarding your good service for the company. They include these costs also as part of CTC.
According to PF act both employer and employee contribute 12% of Basic+DA. Therefore employer contribution is also shown as part of CTC because the company is paying it for the fact that they have hired you for some service.
So, in your salary slip only one PF deduction is shown which is your contribution towards your PF account. The other contribution which is employer contribution is not deducted from your salary but separately contributed by the company.
Apart from these there are other deductions also from salary like Professional Tax(If applicable), Income Tax and also some contribution towards common fund maintained by the company(If the company does so). After deducting all these inhand salary is determined.
Hence, the crux is that inhand salary is always less than CTC.
Regards,
Nilendra
Ravi has explained it very well. Always remember that CTC is cost to company i.e. the cost that the company is bearing due to the fact that it wants to avail your services for it.
Therefore there are some cost that the company has to bear for you either due to statutory requirement or as a gesture of rewarding your good service for the company. They include these costs also as part of CTC.
According to PF act both employer and employee contribute 12% of Basic+DA. Therefore employer contribution is also shown as part of CTC because the company is paying it for the fact that they have hired you for some service.
So, in your salary slip only one PF deduction is shown which is your contribution towards your PF account. The other contribution which is employer contribution is not deducted from your salary but separately contributed by the company.
Apart from these there are other deductions also from salary like Professional Tax(If applicable), Income Tax and also some contribution towards common fund maintained by the company(If the company does so). After deducting all these inhand salary is determined.
Hence, the crux is that inhand salary is always less than CTC.
Regards,
Nilendra
Bonus/Exgratia normally does not form part of CTC (As eligibility is a maximum basic+DA of Rs. 10000). Also the amount paid varies from 8.33% to 20% of Basic+DA.
Normally for the so called management staff, companies pay performance bonus. It can be or cant be part of CTC. This depends upon the company.
Its debatable....
Regards,
Nilendra
Normally for the so called management staff, companies pay performance bonus. It can be or cant be part of CTC. This depends upon the company.
Its debatable....
Regards,
Nilendra
Hi,
CTC ( in Common Parlance) is normally viewed as the Costs incurred for Salary , Perquisites , Amenities ( Canteen, Uniform , etc) and Contributions to Social & Retiral Funds. So It is right in your case that the PF contrbution from employer is added to your CTC.
Regars-Balaji
From India, Coimbatore
CTC ( in Common Parlance) is normally viewed as the Costs incurred for Salary , Perquisites , Amenities ( Canteen, Uniform , etc) and Contributions to Social & Retiral Funds. So It is right in your case that the PF contrbution from employer is added to your CTC.
Regars-Balaji
From India, Coimbatore
what percentage of CTC comprises the Basic salay. is it same or Nearly same for all the co or it can vary from company to company or employee to employee?
From India, Mumbai
From India, Mumbai
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