Step 12: Sum all the deductions i.e total deductions. Step 11: TDS (as per the current or new income tax slab rates) Step 11: Professional tax (varies in each state) Step 10: Health insurance premium, depends on the policy type. Step 9: PF contribution 12% of the basic wage of the employee. Step 9: The sum of basic wage + HRA + CA + Medical Allowances + Other Allowances is called to total earnings which are equal to the above calculated gross salary. (Gross salary – (basic wage+HRA+CA+Medical Allowances) Step 7: Medical allowances fixed 1250 Rs per month. Step 6: Conveyance allowances (CA) fixed 1600 Rs per month. Step 5: Now calculate the HRA of employees, 40% of the basic wage for employees in nonmetro cities and 50% for employees in metro cities. (note: add any other expenses given by the employer) Step 4: Now the gross salary of the employee is CTC – (PF + gratuity paid by employer) Step 3: Gratuity paid by the employer is (basic wage/26)*15 Step 2: Calculate PF contribution paid by employer i.e 12% of the basic wage. Step 1: Calculate the basic wage from the CTC (40-50% of CTC) Take Home Salary Calculation from CTC Step by Step Process Expenses of the company on employee Earnings of Employee The CTC of an employee consists of Three important components, 1. How to Calculate Take Home Salary / In Hand Salary from CTC in India
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