Download - I HAVE Never Understood My Payslip Till Date
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8/6/2019 I HAVE Never Understood My Payslip Till Date
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I HAVE never understood my payslip till date, says Avni Rustagi, a native of Punjab.
Avni, 25, moved to Bangalore four years back in the hope of turning her dream into
reality. In that order, she took up work as a designer with an Information Technologyfirm.
Avni pays Rs 10,000 as rent for a spacious apartment, but ask her about how she managesher other expenses and she throws her hands up in the air. Numbers scare me, she
admits. I dont know a thing about finances.
She says, For instance, I dont even understand my pay structure or CTC as it is called,
what I get in hand or why I get that much.
Wealth realised that Avnis dilemma is a common problem with most working people.The transformation from CTC to take home leaves mostly everyone confused. Lets
decode and understand what happens when CTC becomes take home.
What is CTC?CTC is nothing but the cost that the company incurs to employ you and keep you
employed. It includes your pay and anything else that the company may incur to keep youin employment. Here is Avnis CTC or Cost to Company.
Avnis salary package is quite transparent.
However, each company has its own methodof calculating CTC. Companies may offer an
attractive CTC pay structure but the take
home may be substantially lower. Here are
some components that are commonly used inthe CTC:
1. IT companies often add training costs inthe CTC. These costs are incurred by the
company for training the employees. So,
naturally these do not come in the form oftake home.
2. Banks include interest subsidies in CTC.
That is, if you are a bank employee, you areentitled to a discounted rate on loans.
3. Performance bonuses are also included in
the CTC. These are variable components and
you will be paid out a percentage of thebonus depending on your performance.4. Companies may include the cost of group medical or life insurance. Some companies
may add food subsidies, that is, you may be getting a subsidy on your lunch in the officecanteen.
5. Some companies include gratuity in the CTC. Gratuity is a sort of bonus that is paid
Particulars Rs (per annum)
Basic 480,000
Dearness Allowance 48,000
Entertainment Allowance 12,000
House Rent Allowance 96,000
Conveyance Allowance 12,000
Overtime Allowance 12,000
Medical reimbursement 15,000
Gross salary 675,000
Companys contributionto provident fund
57,600
Annual CTC 732,600
Monthly CTC 61050
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out when you resign or retire from your company. The catch: You are entitled to gratuity
only after completing 5 years in the company.