Learn how to prepare salary breakup


How to use this breakup? Look here the guidance to prepare a salary breakup.

Step 1: Select the location where the employee is deputed.

Step 2: Select if PF (Provident Fund) will be applicable or not? because in some cases employees may opt-out of PF contribution, for more details please read PF rules.

Step 3: Select if Service Weightage will be applicable or not. Service Weightage is only applicable for Karnataka and only for the employee who has completed one year of service, basically, it is only used for Karnataka to prepare for Salary revision breakup.

Step 4: Select if Bonus will be paid Monthly or Yearly or Not Applicable. In some cases employees are paid a bonus on a monthly basis, in that case, an employee will be not be given an Annual bonus and if bonus is not paid monthly then it will be paid applicable. For more details on bonus payable please read- Bonus rules.

Step 5: Select if Gratuity is Applicable or Not? generally Gratuity will be applicable for all employees under payroll and is paid as per Gratuity rule.

Step 6: Select if NFH (National Festival Holiday) will be applicable or not, in some cases employees are offered NFH along with monthly salary and then they will not be paid double payment if they work on National Festival Holidays. However correctness paying NFH in this way is always contradictory, please read NFH rule for more details.

Step 7: Select if LWW (Leave With Wages) will be applicable or not, in some cases employees are offered LWW along with monthly salary and then they will not be paid for leaves they avail and leaves will be treated as Loss of Pay for them. However correctness paying LWW in this way is always contradictory, please read the LWW rule for more details.

Step 8: Enter the amount in Special Allowance, if Special allowance is applicable for the location otherwise you may leave it as "ZERO". For more details on Special Allowance please read the rule.

Step 9: Enter the amount under Other Earnings & Reimbursement Benefits for Attendance Bonus, Performance Incentives, Site & Mobile Allowance or Local Travel Allowance etc.. you may also change the name of these components when copy-pasting the final breakup in your excel sheet. These are the components which might be one time or performance-based pay which do not attract ESI & PF contributions.

Step 10: Enter the amount under Employer Contributions for Insurance & Other if any which is offered to an employee. These names can be changed once the final breakup is copied in your excel sheet.

Step 11: Enter the amount under Deductions for Income Tax or any other deductions if applicable for employee. These components' names can be changed once the final breakup is copied in your excel.

Step 12: Update applicable Minimum Wages under Basic_m & DA_m indicated in Red & Green color at the left top of the structure to prepare the salary breakup. Minimum Wages are subjected to Industry, Location and Skill levels of the employee, hence before preparing the breakup, please check the applicable Minimum Wage for the employee to prepare salary breakup. For more details on Minimum Wages and applicable Minimum Wages please read the Minimum Wages rule.

Step 13: Now keep changing the Gross Amount under Gross Amount Cell until desired net pay is opted-in Net pay cell or desired CTC has opted-in CTC Cell INDICATED IN RED COLOR AT  LEFT TOP OF THE TABLE.

Note: No components should be in Negative, Specially HRA. If HRA is in negative then the same amount to be increased in the Gross Amount or adjust the applicability and not the applicability of components based on your requirement and CTC or Net pay budget. HRA must be 5% of Basic & DA, which break is taken care of automatically and HRA is shown "Zero" if Gross is less.

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