Hello Everyone, Currently I am working as a Business Development Executive for a placement company but I am looking for switch in Hr Generalist role, so before applying for the job I just wanted to prepare myself for the same. Can you help me with what are the basic components of salary and what is their percentage in India as per 2012 with an example. Thanks in advance.
From India , Pune
Hi Karishma,
I am presenting the basic components of salaries as below:
1. Basic salary
2. HRA
3.LTA
4.Conveyance
5.Telephone allowances
6.Special allowances
7.Medical reimbursement
Here i would like to expalain about the percentage.
HRA is calculated 40% of the basic salary. If it's metro, then 50%.
PF is 12% of the basic salary. These HRA & PF % is fixed.
Rest components are depend upon the company norms.
Thanks,
Sarita

From India , Hyderabad
ESI – Employee state insurance deduction is done on the gross pay of the employees. The gross salary is the total income without deductions, that is earned by the employees while doing the job.
EPF – Employee Provident Fund is a retirement benefit and is available for all employees. The EPF deduction is done from a monthly salary and is saved in EPF account.
With these inputs, the employee’s tax liability is computed and TDS is calculated.
TDS – Tax Deducted At Source is a method of direct taxation and is applicable for various income groups. It’s deducted from the employee salary when the salary exceeds the maximum limit exempt from taxes. Some components that also affect the TDS deduction include allowances such as HRA, travel, leave travel, children education, and medical, etc. The net pay of employees is affected due to other deductions like taking care of handicapped children and parents, and interest on house loans.
HRA – House Rent Allowance is applicable for tax exemption depending on the location of the employee. They can claim tax exemption if the HRA is received from employer and pay rent for a rented house.
Travel – Travel payment up to INR 800 per month is tax-free.
Leave Travel- Tax exemption up to is available for two journeys done in a block of four calendar years.
Education- Exemption is given up to INR 100 per month per child and for up to two children of the employee.
Medical – Reimbursement given to the employees and their family members of up to INR15,000 for medical treatment is tax-free.
Most of these payroll benefits impact the payroll calculations and you need to consider them for TDS deductions. Below are the current rates of each allowance and deductions in
ESI(Employee State Insurance)Contributions from both employer & employee:
Basic = 40% or 50%
HRA =20%
DA= 10%
CONVEYANCE ALLOWANCE=6%
MEDICAL ALLOWANCE = 10%
EDUCATION ALLOWANCE = 13%
MISCELLANEOUS ALLOWANCE = 1%
• Employee Contribution: 0.75 %
• Employer Contribution: 3.25 %
Employee State Insurance(ESI) Scheme will be calculated for ₹21,000 of the gross salary. If Gross is above ₹21,000 ESI will be constant.
1. 12% of Basic Salary and standard allowance of Employee goes directly towards Employees’ Provident Fund.
2. 13% of Basic Salary and standard allowance of Employer is divided as follows –
• 3.67% of contribution towards Employees’ Provident Fund.
• 0.5% of contribution towards EPF Administration Charges.
• 0.5% of contribution towards EDLI Administration Charges.
• 8.33% of contribution towards Employees’ Pension Scheme.
Minimum salary limits: Employees with monthly salaries less than or equal to INR 15,000 now have to contribute mandatory towards EPF. PF amount is calculated for the basic amount. PF will be calculated as 12% of the basic.

From India,
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