SALARY STRUCTURE

Compensation is the total amount of the monetary and non-monetary pay provided to an employee by an employer in return for work performed as required.Compensation also includes payments such as bonuses, profit sharing, overtime pay, recognition rewards and checks, and sales commission.

COMPENSATION

The ultimate goal of compensation planning is to reward and encourage employees to do well in their jobs. Some of the objectives are sought to be achieved through effective compensation planning like:

• Entice the employees• Retain the best talent• Ensure equity• Reward new ideas and behaviors• Cost control• Compliance

OBJECTIVES

• Classification of Salary Components• Compensation Structure• Governance/Compliance • Sample Salary Component Structure

CONTENT

Fixed Salary

Reimbursement

Non-monetary/

perksDeferred Systems

Retirement/Social Security

Benefits

Component Structure

COMPOSITION OF SALARY STRUCTURE

• Basic, House Rent Allowance• Conveyance/Transport, Child

Education Allowance, Special/Other Allowance, etc.

Fixed Salary

• Medical, Leave Travel Allowance (LTA)

• Petrol/Vehicle Maintenance, Driver, Telephone, etc.

Reimbursem

ent

Component

• Car, Accommodation, Fixed/Moveable Assets

• ESOP, etc.

Non-Monetary /

Perks

COMPONENT DETAILS

• Bonus/Performance Bonus

• Incentive, Exgratia, etc.Deferred Payments

• Group Medical/Accident Insurance, Life Insurance

• Provident Fund, ESI, Gratuity• Superannuation, Pension

Fund, etc.

Retirement Benefits

COMPONENT DETAILS

Fixed Salary Details

Basic Salary 40% to 50% of CTC

House Rent Allowance

50% of Basic Salary for Metro Cities(Chennai, Mumbai, Delhi and Kolkata)

40% of Basic Salary for Other Cities

Conveyance / Transport Allowance

Rs. 800 per month (for handicapped Rs. 1600 per month)

Child Education Allowance Rs. 100 per child/per month (maximum of two children’s)

Other / Special Allowance As per Section 10(14) of Income Tax act.

FIXED SALARY

Non-Monetary Benefits / Perks Details

Company Car As per company car policy to senior management staff

Accommodations Company provided accommodations

Fixed Assets Fixed Assets / Furniture & Fixtures

Employee Stock Option Plan (ESOP) As per company ESOP plan

Others

Food Coupons (Rs. 1100pm), Gas, Electricity & Water Helper , House Maid, Gardener, etc.

NON-MONETARY BENEFITS

Reimbursement Components Details

Medical Rs. 15000 p.a. (for self, spouse and dependants)

Leave Travel Allowance (LTA)One month basic salaryTwo claims in a block of 4 years (current block 2014 - 2017)

Telephone As per company compensation policy Rs. 2000 – 4000 p.m.

Vehicle Maintenance/Petrol

Employer car (fuel & maintenance expenses met by employer)No limit – Up to Rs.10000 p.m.Employee car (fuel & maintenance expenses met by employer)a. Rs. 1800p.m. for small car (with

1.6cc)b. Rs. 2400 p.m. for big car (with

above 1.6 cc)

Driver Recommended for senior management staff

REIMBURSEMENT COMPONENT

Retirement Benefits Details

Company Contribution to Provident Fund 12% of PF wage

Gratuity 4.81% of basic p.m.

Superannuation As per company policy / trust by-laws

Pension Fund As per company policy or New Pension Scheme (NPS)

Insurance Group Mediclaim Insurance Group Life Insurance, etc.

Employer Contribution to Employees State Insurance (ESI)

4.75% of ESI wage

RETIREMENT BENEFITS

• Ensure that the salary components are in compliance with income tax rules and labour laws

• Refer to minimum wages act-state rules for any specific segment of workers

• Union employees salary structures are governed by Union agreement/settlement

• Ensure that the special/other/personal allowance is lesser than the other components in salary structure

GOVERNANCE AND COMPLIANCE

• Your variable is set approximately 20% - 30% of your package

• 80% of your variable will depend upon your performance rating/billability etc. 20% will depend on the company performance.

• 80% of your variable will come in your salary with the heading "Variable Allowance".

• The company performance amount will be credited on a quarterly basis based on the company’s Quarterly result. This will come under the heading "Miscellaneous"

• You can find some unique deductions like "Labour Welfare" and "TCS Welfare Trust". The TCS Welfare Trust is used in case of medical emergencies which require high cost of treatment. This is amount is shared by all members of Tata Group of Companies

• You can get Sodexo coupons an save tax

• In Accenture, you have the flexibility to change your package.

• You can decide your own basic.

• however, there is a limit to that. You cannot have more than 45% of your package to be assigned to basic.

• There is a lower limit as well

THANK YOU !!!