Components of CTC structure

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Hi All,

What components have to be mandatory part of the CTC structure? I read some can be excluded. e.g. HRA

Please suggest more on this.

Thank you.

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2

Hi Anushri,

Mandatory components could be as mentioned below: but in any case HRA cannot be missed or avoided. As per me :

Basic
HRA
FBP(Flexible Benefit Package).

Lets wait from others to hear on the same.

Regards
Arpana

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Basic + DA - Should be as per Min Wages atleast; With Recent amendments which will come into effect next year probably, Min Wages should be 50% of Total Salary so your formula will be Max(50% of Salary, Min Wages)

HRA (Mandatory in Maharashtra as per Maharashtra Workmen’s Minimum House Rent Allowance Act, 1983) - 5% to 50% of Basic Salary

With recent amendments in laws, avoid having multiple components. Try to keep it simple as much as possible.

For e.g. upto 50K Salary, I prefer
Basic Salary
HRA
Other Allowance
Gross Salary

Here also, while giving Allowances make sure Amendment in PF Act is adhered to. i.e. PF should be deducted on Basic Salary + Other allowances (total upto Rs. 15000)

if your Basic is 9000, HRA 4500 & other Allowance 5000; then you need to deduct PF on (9000+5000) = 14000 and not 9000.

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Is it mandatory that PF should be deducted on Basic +HRA?

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PF is never deducted on HRA

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Hi Richa,

No, in fact PF will never be calculated on HRA. It is always Basic+DA (if DA applicable).

Regards
Arpana

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PF will be calculated on Basic + Allowances (Excluding HRA)

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