Hi,
How to set up a Compensation structure if you are start up company?
A quick startup guide would be very helpful. Please suggest.
Thank you.
3 Likes
Hi Nisha,
Standard Compensation structure can be:
Gross Salary (A)
Basic Salary= Max(Minimum Wages OR 30% to 50% of CTC)
HRA = 40%/50% of Basic
Other Allowance = Left over of Gross
Benefits (B)
Employer PF = 13% of Basic Salary
Employer ESIC = 3.25% of Gross Salary (If salary less than 21000)
Gratuity = 15/26*Monthly Basic Salary/12
CTC (A+B) = Gross Salary + Benefits
Deductions ©:
Employee PF = 12% of Basic Salary
Employee ESIC = 0.75% of Gross Salary
PT = As per state norms
Net Salary (D = A-C) = Gross Salary - Deductions
Please note:
Other Allowance can be further split into flexible allowance for Tax Exemptions
- LTA
- Reimbursements (Petrol/Travel)
- Children Education Allowance
& others
4 Likes
Hi Ankit
Can you please help me with the compensation structure when basic pay is 15k and there are no others allowance.
So the structure my company follows is as below…
Basic - 15 k
Hra (this has been taken as a balance fig)
=Gross salary
+Employer pf
=CTC
(-)Deductions:- employee pf +employer pf +esi employee+esi employer + pt
= Net in hand salary.
- Performance bonus
= Total CTC (Gross sal+ pf +esi + pb)
4 Likes
Hi @ayesha89
Considering your salary structure it’s good to have like below.
Gross = Basic + HRA (if required DA should be considered for employees less than 15k).
and in deductions it should be
Deductions = PF + ESI + PT
Net take home = Gross - Deductions
- Note: HRA are subjected to certain IT exemptions and it’s always good to have a percentage. Balance create a component called “Special Allowance” and add there.
2 Likes
| Considering Maharshatra State | |
|---|---|
| Skilled Labour | |
| Basic | 12,386 |
| HRA | 620 |
| GROSS SALARY | 13,006 |
| Employer PF | 1,610 |
| Employer ESIC | 423 |
| Gratuity | 595 |
| CTC | 15,634 |
| Employee PF | 1,486 |
| Employee ESIC | 98 |
| PT | 200 |
| NET SALARY | 11,222 |
In Maharashtra, 5% HRA is mandatory.
3 Likes
With Basic Pay as 15000
| Basic | 15,000 |
| HRA | - |
| GROSS SALARY | 15,000 |
| Employer PF | 1,950 |
| Employer ESIC | 488 |
| Gratuity | 721 |
| CTC | 18,159 |
| Employee PF | 1,800 |
| Employee ESIC | 113 |
| PT | 200 |
| NET SALARY | 12,888 |
3 Likes
Dear Dinesh
Kindly elaborate 80D Senior Citizen Parents Benefit 50K. What all can be covered.
Thanks & Regards
Jain Seshan
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| Particulars | Maximum Limit |
|---|---|
| Medical Insurance premium + Preventive health checkup (sub limit of Rs. 5000) of Self, Spouse and dependent Children | 25,000 |
| Medical Insurance premium + Preventive health checkup (sub limit of Rs. 5000) of parents who are non-senior citizens | 25,000 |
| Medical expenditure on Self, spouse and dependent Children | NOT ALLOWED |
| Medical expenditure on Parents who are non-senior citizens | NOT ALLOWED |
| MAXIMUM LIMIT OF DEDUCTION U/S 80D | 50,000 |
| Particulars | Maximum Limit |
|---|---|
| Medical Insurance premium + Preventive health checkup (sub limit of Rs. 5000) of Self, Spouse and dependent Children Non Senior Citizens | 25,000 |
| Medical Insurance premium + Medical expenditure + Preventive health checkup (sub limit of Rs. 5000) of parents who are senior citizens | 50,000 |
| Medical expenditure on Self, spouse and dependent Children | NOT ALLOWED |
| Medical expenditure on Parents who are senior citizens | COVERED ABOVE WITHIN THE LIMIT OF Rs. 50000 |
| MAXIMUM LIMIT OF DEDUCTION U/S 80D | 75,000 |
4 Likes
Hi @jain
Every individual or HUF can claim a deduction under Section 80D for their medical insurance which is taken from their total income in any given year.
An individual can claim a deduction of up to Rs 25,000 for the insurance of self, spouse, and dependent children & An additional deduction for the insurance of parents is available to the extent of Rs 25,000 if they are less than 60 years of age or Rs 50,000 (as per the Budget 2018) if your parents are aged above 60.
If both the taxpayer and the parent whom the medical covers have been taken for are aged more than 60 years, the maximum deduction that can be availed under this section is to the extent of Rs 1,00,000.
Any payments made towards preventive health check-ups will entitle a taxpayer to a deduction of up to Rs 5,000, which is within the overall limit of Rs 25,000/Rs 30,000.
For ref: Budget Changes April 2018-2019 - Greytip Knowledge Center - greytHR Admin Guide
2 Likes
Hi
You can also add the below info.
Budget 2018 amended Section 80D of the Income Tax Act which allows a deduction for medical expenditure incurred on senior citizens. However, senior citizens must not be covered under any health insurance policy.
5 Likes
Yeah, true!
Most of the times they are not covered by default. But majority of employers do provide parental schemes, which an employee can utilise.
There are lot of insurance agencies who are doing for companies and are easily available in the market.
1 Like