Salary Compensation - Know about your salary components, Employer Contribution and Employee Deductions.

1. SALARY COMPENSATION
Presented by
Porkodi Chandrasekaran
HR - Manager

2. Basics of Salary
 CTC : CTC means Cost To Company
CTC is definitely not your take-home Pay!
 Gross Salary: is salary before deductions
Net Take Home + Employee Deductions
 Net Salary: is what you get after deductions
Deductions - PF + ESIC+ PT + Applicable Taxes.

3. What is CTC?
 CTC is Cost to company.
 CTC is the money given to you + the money spent on you.
 CTC Components:
Basic Salary + HRA ( Housing Rental Allowances) + Conveyance +
Special Allowances + Medical Allowances (Optional) +
Employer Contributions + Employee Deductions.

4. Salary Calculations
How Salary is calculated???
Total CTC = Gross Salary + Employer Contribution (Employee Benefits)
Take Home Salary = Gross Salary – Employee Deductions.

5. Employer Contribution & Employee Deductions
Particulars Employer Contribution Employee Deductions
EPF 12 % on Basic + 1.16 % Admin Charges 12 % on Basic
ESIC 4.75 % on Gross 1.75 % on gross
Gratuity 4.81 % on basic Nil
LWF 40 (Annual Contribution) 20 (Annual Deduction)
PT Nil 200 ( if Gross is more than15,000)
Income Tax Nil Subject to the Eligibility

6. The Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952
Scheme Name Employee
Contribution
Employer Contribution
Employee Provident Fund 12 % 3.67 %
Employees’ Pension
Scheme
0 8.33 %
EDLI 0 0.5 %
EPF Administrative Charges 0 0.65 %
EDLI Administrative Charges 0 0.01 %
Total 12 % 13. 16 %

7. The Employees’ State Insurance Act, 1948
 Employee earning wage limit for coverage under the ESIC Act, 1948 and
Amendment rules, 2017 Ceiling wage limit is Rs. 21,000/- per month (Gross
Salary)
 ESIC Contribution:
Employee – 1.75 % on Gross Salary
Employer – 4.75 % on Gross Salary

8. The Payment of Gratuity Act,1972
 Employer Contribution – 4.81 % on Basic Salary
 Gratuity will be paid when an employee completes minimum 5 years of
continuous service with the employer.

9. Labour Welfare Fund
 Labour welfare refers to all the facilities provided to labour in order to improve
their working conditions, provide social security, and raise their standard of living.
Contribution
Frequency
Contribution
Month
Employee
Contribution
Employer
Contribution
Total
Contribution
Annual December 20 40 60

10. Professional Tax
 Karnataka Professional Tax slab rates for the current financial year
(2017 – 2018).
Monthly Gross Salary Amount Payable as Professional Tax Per Month
Up to Rs 15,000 Nil
Rs 15,001 and or above Rs. 200

11. Income Tax Slab 2017 - 2018
Income Rate Slab (FY 2017-18) Tax Rate (FY 2017-18) Surcharge Rate FY 2017-18)
Up to Rs. 2,50,000 Nil 0%
Rs. 2,50,001 to Rs. 5,00,000 5% 0%
Rs. 5,00,001 to Rs.10,00,000 20% 0%
Rs. 10,00,001 to Rs. 50,00,000 30% 0%
Rs. 50,00,001 to Rs. 1,00,00,000 30% 10%
Above Rs. 1,00,00,001 30% 15%
Educational Cess Educational Cess = 3% of the Sum of Total Tax and Surcharge
Total Tax Payable=Total Raw Tax + Surcharge + Educational Cess

13. THANK YOU…