How do I calculate the available salary?

Updated on : December 8, 2021 by Harvey Mathis



How do I calculate the available salary?

Since his basic is 650,000 and other allowances are 650,000, let's calculate his monthly salary in the game.

Eliminate 5 to 12% of the basic as FP. Generally, most companies go for 12%, that is, 12% of 650,000 = 78,000 per year or 6,500 per month.

Now your salary would be 1300000-78000 = 1222000. Assuming you live in a metropolitan city, 50% of the basic can be exempt from tax as long as you pay that amount of rent or up to 2 lakh (or the actual amount, whichever is less) Tax exemption if you are paying EMI for a home loan. For our purpose, assume 50% of the basic as your rent, that is, 325000.

Now what remains is 1222000 - 325000 = 897

Keep reading

Since his basic is 650,000 and other allowances are 650,000, let's calculate his monthly salary in the game.

Eliminate 5 to 12% of the basic as FP. Generally, most companies go for 12%, that is, 12% of 650,000 = 78,000 per year or 6,500 per month.

Now your salary would be 1300000-78000 = 1222000. Assuming you live in a metropolitan city, 50% of the basic can be exempt from tax as long as you pay that amount of rent or up to 2 lakh (or the actual amount, whichever is less) Tax exemption if you are paying EMI for a home loan. For our purpose, assume 50% of the basic as your rent, that is, 325000.

Now what remains is 1222000 - 325000 = 897000

Consider you get a transfer of 1600 per month, a phone bill allowance of 1500 per month, food stamps worth 2,200 per month, a medical allowance of 1500 per month, professional tax of 200 per month amounting to 7000 per month or 84,000 per year. All these components are exempt from tax. Also, LTAs of quantity X are exempt from tax. Let it be around 30,000 per year.

Now what remains is 897000 - 84000 - 30000 = 783000

Under section 80 (many sub-clauses like C, D, CC, CCC and more), you can invest your money in various schemes to get a tax exemption of up to 150,000. Assuming you have invested that amount also somewhere. What is left is 783000 - 150000 = 633000

Now on this amount, you are supposed to pay taxes accordingly. The first 250,000 has no tax, the next 250,000 has 10%, and the remainder 133,000 has 20%. That amounts to 25,000 + 26,600 = 51,600 per year. Or 4300 per month.

Therefore, your current salary would be 1,300,000–78,000 (PF) –2400 (Occupational Tax) - 51600 (Tax) -30,000 (LTA) -26400 (Food Stamps) - 18,000 (Medical Allowance) =

1093600 per year or 91 133 per month. + 2200 food stamps by value is what you get per month.

30,000 and 18,000 LTAs and medical allowance will be refunded as bills are entered or credited to your account at the end of the year after deducting taxes for unused allowances.

Most of the figures are based on assumptions. If you are unable to submit rental receipts for 325,000 per year, you could end up paying higher taxes at the end of the season or every month. You can also get higher transportation if you have a car above 1600 CC and incur more costs (up to 30,000 per year).

There is not a 100% satisfactory answer to your question. Your salary in hand is determined by so many external and internal factors. To know it, you must have a clear idea about FP, the basic salary, the variable salary, health insurance, your savings statement, allowances, etc. and the most important thing you must know which tax slab to which it belongs. It is very difficult to predict the exact salary available based on your package.

I used to think about this too much when I received my first salary in September 2011 ... 5 years ago and I still can't quite figure out how it is calculated !!

But, I have my own w

Keep reading

There is not a 100% satisfactory answer to your question. Your salary in hand is determined by so many external and internal factors. To know it, you must have a clear idea about FP, the basic salary, the variable salary, health insurance, your savings statement, allowances, etc. and the most important thing you must know which tax slab to which it belongs. It is very difficult to predict the exact salary available based on your package.

I used to think about this too much when I received my first salary in September 2011 ... 5 years ago and I still can't quite figure out how it is calculated !!

But I have my own way of predicting it, which is very easy and 85% accurate. Giving you an example:

Assume your package is ₹ 1,000,000 / year (you exclude variable payment and you have reported a savings for the current tax year of ₹ 100,000).

Now to find out your salary per month:

just do "1000000 / 13.5" and you will get your starting salary.

The divisor "13.5" will vary from 13.2 to 14.3 depending on the tax tiles.

Note:

This is just my shortcut to figuring out the predictable monthly salary just to avoid all the confusion and time wasting around my salary.

It's actually pretty straightforward, here is the calculation:

Gross: 13,00,000
Employee FP: 12% of 13,00,000 = 78000
Inhand per month before taxes: (Gross - Employee FP) / 12 = (1300000-78000) / 12 = 101833

You should be more careful with the allowances part, as they help save taxes. If your allowances are not itemized to contain LTA, Medical, HRA, etc., you will lose a large portion of your salary in taxes.

From your total CTC, reduce the following variables

  • Provident Fund
  • If there is an amount deducted for health insurance, then deduct that amount.
  • If your CTC has a performance bonus that is paid quarterly or annually, then disconnect it from CTC
  • deduct any coupon refund (SUDEXO) and medical refund if any

Finally deduct the applicable tax.

Divide the amount you get after all deductions by 12. The resulting amount is your disposable wages.

  1. Take-Home Salary = Gross Salary - Income Tax - Employee's FP Contribution (PF) - Prof. ...
  2. Gross salary = Cost to the company (CTC) - Employer PF Contribution (EPF) - Tip.
  3. Tip = (Basic salary + Provision of social services) × 15/26 × No.

If you like my answers, vote for it.

Thanks.

130,000 is your PA salary
-10% of your tax = 1170000
divided by 12 = 97,500
97,500 will be approx. salary, unless your Organization has no hidden Deduction from the Company or Variable Pay

You will get approximately rs 90,809.72, if there is no more hidden deduction it is for your company.

Visit this site: India Salary Calculator

If you know of another variable included in your CTC, based on that, you can get a rough idea.

Subtract the PF head from the total base salary and divide it by 12, which in this case would be (1,300,000–78,000) / 12 = INR 101,833.

Age: 30, Indian male, currently living in BayArea, CA (USA).

Exp - 8 years

Current - $ 7000 per month in hand (CTC $ 105k pa).

My journey so far:

2009-2012 -> 3LPA to 6LPA.

I come from a small town and from a lower middle class background. My childhood dream is to work in the United States for a few years and come back.

I had graduated from the renowned engineering college in Andhrapradesh and was placed in HCL during on-campus placements. IT was hit hard by the ongoing recession period (2008) and therefore HCL kept everyone in the dark about the dates of incorporation. Fortunately, I got a referral through a mutual friend at a multinational product-based company.

Keep reading

Age: 30, Indian male, currently living in BayArea, CA (USA).

Exp - 8 years

Current - $ 7000 per month in hand (CTC $ 105k pa).

My journey so far:

2009-2012 -> 3LPA to 6LPA.

I come from a small town and from a lower middle class background. My childhood dream is to work in the United States for a few years and come back.

I had graduated from the renowned engineering college in Andhrapradesh and was placed in HCL during on-campus placements. IT was hit hard by the ongoing recession period (2008) and therefore HCL kept everyone in the dark about the dates of incorporation. Fortunately, I got a referral through a mutual friend at a multinational product-based company.

I started as a Storage QA Automation (Perl) Engineer in Jan 2009 with 3 LPAs. And little by little he began to realize how difficult it is to have on-site opportunities in such large organizations and also to be a quality control engineer. Opportunities for learning and professional growth are limited. Repetitive work added to current votes. It was then that I thought enough was enough and I decided to switch to another company to suit my interests. He set up an exit plan and began exploring opportunities in challenging startups.

2013-2016 -> 6LPA to 16LPA

I finally joined a startup in April 2012 with 7.4 LPA. and began to take on challenging tasks / roles. Sometimes I even worked for months without weekend breaks when no one asked me to. I made my way slowly to the core QA team after proving myself at every stage. He had been through countless difficult situations in professional and personal life. But I never gave up hope of realizing my dreams one day.

After 3 long years, our boss / compensation manager called me for a meeting to ask if I am interested in moving to the US office, I almost broke down in tears and thanked them for trusting me. He moved to the California Bay Area almost a year ago.

Technically speaking, I am currently in a second company. However, I changed more than 5 teams internally to work on things that I am really passionate about. Sometimes you have to go the extra mile if things don't fit together.

Now when I look back, joining this startup was the best decision I ever made and it really helped me make my childhood dream come true.

Few things I learned the hard way:

Start putting points first so you can connect later.

Steve Jobs famous quote: “You can't connect the dots by looking ahead; you can only connect them looking back. So you have to trust that the dots will somehow connect in your future. You have to trust something: your instinct, your destiny, your life, your karma, whatever "

We are all unique and so is the equation of happiness.

Happiness comes from within. Your appearance and what others think of you does not matter.

Am I happy so far?

Yes. I built my own house in my hometown and bought a house in Bangalore. Pair of land close to our town. I was unable to opt for MS due to financial problems. However, now I was able to achieve my dream after 7 long years of waiting and earning decently.

Being part of a startup, I get to work on cutting edge technologies, so life is always unsettling.

In my words, if you want something strongly and start working towards it, one day you will definitely achieve it. Never give up on your dreams.

EDIT 1:

Comments cannot be answered in anonymous replies. Hence, responding to the comments here.

Tushar Gupta:

I live with my wife and my son. And besides, I have a home loan in India. More exemptions mean more disposable wages. In our start-up, there is no concept of variable salary and year-end bonus, etc. CTC: taxes are on salary. Expenses are a completely different topic.

Mukesh Srivastav

Thanks.

Lockdown blessed me a good hour today, found the logic behind the private company salary (INR) calculation.

Generally, people are curious to know what your salary would be when negotiating with HR while deciding on a new job offer. The fixed CTC you requested (if approved) may not yet provide you with the desired available salary and therefore you will have no more room to negotiate when you get the same fixed ctc offer that you requested. Therefore, it is best to tell HR the desired numbers, that is, the salary available after deductions, while discussing a job offer.

"Any given annual fixed CTC, divide that fixed yes

Keep reading

Lockdown blessed me a good hour today, found the logic behind the private company salary (INR) calculation.

Generally, people are curious to know what your salary would be when negotiating with HR while deciding on a new job offer. The fixed CTC you requested (if approved) may not yet provide you with the desired available salary and therefore you will have no more room to negotiate when you get the same fixed ctc offer that you requested. Therefore, it is best to tell HR the desired numbers, that is, the salary available after deductions, while discussing a job offer.

"Any given annual fixed CTC, dividing that annual fixed CTC by 12 makes it a monthly fixed CTC. Now multiply the monthly fixed CTC by 0.88 (if you want to show full savings) gives you the fixed partial monthly salary available after all deductions included. taxes ".

PD: approximate; very close to the real numbers.

20 Lac Fixed INR CTC ~ 20.00000 / 12 = 166,666.66 * 0.88 = 146,666.66 INR salary available after all deductions including taxes.

For 20 Lac INR fixed CTC, you need to show full savings reaching 1.5 Lac INR / year only then can you use multiplier 0.88; the multiplier would decrease if it showed zero savings, so there would be a lower disposable wage, as taxes would be standard in such a case.

Example:

Your CTC: 12LPA with 90% (10.8 LPA) of fixed salary and 10% (1.2 LPA) variable

  1. Fixed monthly payment = 108000/12 = 90000
  2. Basic salary: 30,000 / -
  3. EPF deduction (12% employee + 12% employer contribution) = 7,200 / -
  4. Tip (4.81% of basic) = 1443 / -
  5. Monthly net salary (90000 - 7200-1443) = 81 357 / -
  6. Calculating taxes
    1. HRA (40% of basic) = 12000 / - PM
    2. Transport = 1600 / - PM
    3. Medical = 1250 / - PM
    4. Sub total PM = (12000 + 1600 + 1250) = 14850 / - PM
    5. Annual subtotal = 178 200 / -
    6. Investment (80 C) = 150,000 / - including employee contribution to EPF
    7. Zero tax up to = 250000 / -
    8. Total taxable income = 1019484 (84 957 * 12) - 178 200- 150,000–25
Keep reading

Example:

Your CTC: 12LPA with 90% (10.8 LPA) of fixed salary and 10% (1.2 LPA) variable

  1. Fixed monthly payment = 108000/12 = 90000
  2. Basic salary: 30,000 / -
  3. EPF deduction (12% employee + 12% employer contribution) = 7,200 / -
  4. Tip (4.81% of basic) = 1443 / -
  5. Monthly net salary (90000 - 7200-1443) = 81 357 / -
  6. Calculating taxes
    1. HRA (40% of basic) = 12000 / - PM
    2. Transport = 1600 / - PM
    3. Medical = 1250 / - PM
    4. Sub total PM = (12000 + 1600 + 1250) = 14850 / - PM
    5. Annual subtotal = 178 200 / -
    6. Investment (80 C) = 150,000 / - including employee contribution to EPF
    7. Zero tax up to = 250000 / -
    8. Total taxable income = 1019484 (84 957 * 12) - 178 200- 150,000–250000 = 441 284 / -
    9. 10% slab tax on (2.5–5.0) Lakh = 10% of 250,000 / - = 25,000 / - + 3% SAS = 25,750 / -
    10. 20% slab tax on the following (5.0-10) Lakh = 20% of 191284 / - = 38257 / - + 3% SAS = 39405 / -
    11. Applicable monthly tax = 5430 / -
  7. Take-home net pay (after taxes and all deductions) = 81 357-5430 = 75927 / -

* Tax on salary and variable benefits would depend on company policy, amount to be paid

************************************************************* *******************

  1. Annual fixed payment = Annual fixed payment (all components) - EPF 24% (Employee contribution 12% and employer 12% - Government taxes (according to taxes) - Tip (4.81%)
  2. Fixed monthly payment = Fixed annual payment / 12
  3. Annual Variable Payment = Average Annual Variable Payment (based on organization history) - Government Tax
  4. Monthly variable payment = Annual variable payment / 12
  5. Monthly payment (total) = Fixed monthly payment + Variable monthly payment

Other Guides:


GET SPECIAL OFFER FROM OUR PARTNER.