What Is Fixed Salary?

What is fixed pay in CTC?

The base salary which is definite regardless of the employee performance including other allowances minus tax on a monthly basis is defined as fixed pay and variable pay is a bonus or reward given to the employee for his/her high standard of performance in the company for the current year and is taxable..

Which is better CTC or gross salary?

Gross Salary: Subtract gratuity and the employee provident fund (EPF) from Cost to Company (CTC), the amount that you get is your Gross Salary. It is the amount that you get before deduction of income taxes and other deduction such as bonus, overtime pay, holiday pay etc.

Is fixed salary in hand salary?

Basic salary is a fixed part of the compensation structure of an employee and forms the core of the salary of an employee. It does not vary, unlike the other aspects of Cost to Company. The entire amount of the basic salary shall be part of the in-hand salary.

How is base salary calculated?

Multiply the number of hours you work per week by your hourly wage. Multiply that number by 52 (the number of weeks in a year). If you make $20 an hour and work 37.5 hours per week, your annual salary is $20 x 37.5 x 52, or $39,000.

How much is deducted from CTC?

So 24 per cent of the basic salary gets deducted….Difference Between CTC and Take Home Salary Explained.Component of salaryAmount (Rs.)Taxable amountBasic salary2,40,0002,40,000House rent allowance60,00036,000Conveyance allowance8,0000Entertainment allowance6,0006,0007 more rows•May 17, 2015

How is fixed pay calculated in CTC?

How to calculate your take-home salary?Step 1: Calculate gross salary. Gross Salary = CTC – (EPF + Gratuity)Step 2: Calculate taxable income. Taxable Income = Income (Gross Salary + other income) – Deductions. … Step 3: Calculate income tax** … Step 4: Calculating in-hand/take home salary.

Is PF part of fixed salary?

Take a look at your CTC break-up and you will find fixed heads like basic pay (usually 40-50% of the CTC), home rent allowance (usually 40-50% of the basic salary), gratuity, PF, and reimbursements such as car fuel and mobile bills, apart from variable components such as annual bonus and performance bonus.

What is your gross salary?

Gross pay is the total amount of money an employee receives before taxes and deductions are taken out. For example, when an employer pays you an annual salary of $40,000 per year, this means you have earned $40,000 in gross pay.

What fixed monthly income?

Fixed monthly salary = basic monthly salary + fixed monthly allowances. Basic monthly salary: This is payment that does not vary from month to month, regardless of employee or company performance, and regardless of whether the employee takes medical or personal leave. … Examples include fixed food and housing allowances.

What will be my Inhand salary?

What is the formula for salary calculation? Take Home Salary = Gross Salary – Income Tax – Employee’s PF Contribution(PF) – Prof. Tax. Gross Salary = Cost to Company (CTC) – Employer’s PF Contribution (EPF) – Gratuity.

Does PF get doubled?

According to the rule, any employee can increase his monthly contribution up to 100% of basic salary. If any employee doubles his monthly total, then the amount of his PF fund will double itself.

What is the difference between fixed and variable pay?

Fixed pay is the fixed amount of salary that an employee gets at the end of the month whereas Variable pay is the incentive paid to the employee, monetary or non-monetary, based on their performance for the month. The ratio of fixed to the variable component, as a norm, varies based on the role the employee plays.

Is PF part of CTC?

Most employers contribute 12% (called PF) of basic salary every month to employee’s Provident fund account, shown in CTC. An employee also contributes 12% (called VPF). … Employer PF is part of CTC not shown on Salary Slip.

What is the basic salary?

Simply put, basic salary refers to the particular amount of money an employee is paid prior to the application of any additions. Basic salary, gross salary, and net salary all share the same meaning and can be calculated in the same way.

Why is PF deducted twice?

EPF rule says 12% of your basic + allowance will be deducted from your gross salary and employer will match the same amount (which is included in CTC). So basically 24% of your (basic+allowance) deducted and deposited to your EPF account.