Can any one guide If we have cash in hand salary then how we can calculate the gross & Cost to the company(CTC inclusive of TDS). Regards, Arti Chopra
From India, New Delhi
3From India, New Delhi
In my opinion, "salary slips" - generally a half A4 sized paper printed by a computer - shall give you all the details of salary including Gross and Net salary.
Payment of Wages Act stipulates that every employee (specifically in non-managerial positions) be given an account of all payables and deductions along with their salary - thus making salary slips mandatory.
By adding certain tangible monetary benefits extended by the company, to the gross Pay and multiplying it with 12 shall give you the CTC per annum.
I presume you are not working as an HR in any company; because generally HR professionals are supposed to know such basic things, else they would be weeded out during the Interview itself.
Warm regards.
From India, Delhi
Payment of Wages Act stipulates that every employee (specifically in non-managerial positions) be given an account of all payables and deductions along with their salary - thus making salary slips mandatory.
By adding certain tangible monetary benefits extended by the company, to the gross Pay and multiplying it with 12 shall give you the CTC per annum.
I presume you are not working as an HR in any company; because generally HR professionals are supposed to know such basic things, else they would be weeded out during the Interview itself.
Warm regards.
From India, Delhi
Sir, My question is if we hire an employee on net salary other deductions like TDS & PF by employee & employer side is bear by employer than how we can calculate employee CTC.
From India, New Delhi
From India, New Delhi
Hi Arti Cost to company includes each of the salary components like BASIC DA HR allowances PF ESIC , bonus everything which co gives to employees or incurs exp on him. Siddharth
From India, Surat
From India, Surat
Dear Arti
What you have cited, is not a standard industry practice; and that's the reason you find yourself in confusion/trouble.
Hope you understand what is -
CTC (which includes almost everything the company spends on the employee, including the PF and ESI contribution which an employer makes on behalf of the employee - also expenses on 'notional' gratuity is also added.);
Gross Salary (which includes everything paid to the employee in cash plus the deductions that have been effected from the employee like employee's share of PF, ESI or recovery of any loans/advances);
Net Salary (which is the ACTUAL amount after all deductions including Income Tax (TDS) which goes in the hands/bank account of the employee).
Hope the above three terms are clear to you. So if you know the Net Salary; then extrapolate the other amounts which are either paid by the employer on behalf of employee or deducted from the employee,
When you add what has been deducted from the salary to the Net Salary; you arrive at the Gross Salary.
To Gross Salary, when you add the amount paid/spent by the employer (which are not paid/payable to the employee presently) you arrive at the CTC .
Another point to be noted is : An employer can not pay TDS of the employee; as it has to be deducted from the salary. Any TDS paid by the employer is ADDED to the SALARY of the employee; this is the view adopted by the Income Tax authorities. So this illegal/unethical practice needs to be discontinued.
Hope the above clarifies the issue.
Warm regards.
From India, Delhi
What you have cited, is not a standard industry practice; and that's the reason you find yourself in confusion/trouble.
Hope you understand what is -
CTC (which includes almost everything the company spends on the employee, including the PF and ESI contribution which an employer makes on behalf of the employee - also expenses on 'notional' gratuity is also added.);
Gross Salary (which includes everything paid to the employee in cash plus the deductions that have been effected from the employee like employee's share of PF, ESI or recovery of any loans/advances);
Net Salary (which is the ACTUAL amount after all deductions including Income Tax (TDS) which goes in the hands/bank account of the employee).
Hope the above three terms are clear to you. So if you know the Net Salary; then extrapolate the other amounts which are either paid by the employer on behalf of employee or deducted from the employee,
When you add what has been deducted from the salary to the Net Salary; you arrive at the Gross Salary.
To Gross Salary, when you add the amount paid/spent by the employer (which are not paid/payable to the employee presently) you arrive at the CTC .
Another point to be noted is : An employer can not pay TDS of the employee; as it has to be deducted from the salary. Any TDS paid by the employer is ADDED to the SALARY of the employee; this is the view adopted by the Income Tax authorities. So this illegal/unethical practice needs to be discontinued.
Hope the above clarifies the issue.
Warm regards.
From India, Delhi
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