Scribd
Upload
166 views

Compensation Plan: Component Amount

This document outlines the components of an employee compensation plan including fixed pay, variable pay, and cost to company. Fixed pay includes basic salary, allowances, and benefits that are guaranteed. Variable pay depends on individual, team, or company performance and includes incentives and bonuses. Cost to company is the total annual monetary and non-monetary costs to the employer for an employee. Key components discussed include basic salary, house rent allowance, medical allowance, gross salary, earned leave, sick leave, and compensatory off. Salary is determined based on qualifications, experience, and ranges from a minimum to maximum amount.

Uploaded by

Anitha O
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
166 views

Compensation Plan: Component Amount

This document outlines the components of an employee compensation plan including fixed pay, variable pay, and cost to company. Fixed pay includes basic salary, allowances, and benefits that are guaranteed. Variable pay depends on individual, team, or company performance and includes incentives and bonuses. Cost to company is the total annual monetary and non-monetary costs to the employer for an employee. Key components discussed include basic salary, house rent allowance, medical allowance, gross salary, earned leave, sick leave, and compensatory off. Salary is determined based on qualifications, experience, and ranges from a minimum to maximum amount.

Uploaded by

Anitha O
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Compensation Plan

An “employee compensation plan” collectively refers to all the components in addition to the
manner in which the compensation is paid and for what purpose employees receive case bonuses,
salary increases and incentives.

Compensation plan

Components in compensation plan

Component Amount
Basic -
HRA  
Allowance  
Bonous  
Benefit  
Total fixed Cash  
PF  
Gratuity  
Total fixed Compensation  
Other compensation benefits  
Health benefit  
Variable Pay  
-  
Cost per Month  
Total cost per annum  

fixed Pay – Fixed pay is the guaranteed salary that employees get on monthly basis irrespective
of their individual performance, team’s performance, or company’s performance. Fixed pay is
pre-defined and is clearly communicated to employees at the beginning of their job.

Base salary, house rent allowance, conveyance allowance, dearness allowance, leave travel
allowance, etc. are some common examples of fixed pay components.

Variable Pay – Variable pay, pay for performance, or risk pay, is the compensation, which
unlike fixed pay, must be earned every time to be obtained. Variable pay is not guaranteed and is
paid only on the achievement of specific qualitative or quantitative goals by individual
employee, team or the company.

Variable payment is usually paid out quarterly, half yearly, annually, or on completion of a
specific goal. Incentives, bonus, profit sharing, sales commission, etc. are some common
examples of variable payment.

Cost to Company (CTC) – Cost to company (CTC) is the total cost of monetary & non-
monetary benefits that an employer incurs on an employee during one year.

Generally, the salary offered to employees in India is in form of CTC and the detailed breakup of
various salary components (basic, HRA, PF, allowance, etc.) that are included in CTC is given to
employees in their offer letters.

Allowance – Allowance is the fixed amount paid to employees, in addition to basic salary, for
covering expenses of activities such as travelling to the workplace, renting a house, or eating
food. Generally, payment for all allowances is included in the CTC of employees.

Basic Salary – Basic Salary or Basic Pay, is the first and core component of your salary
structure and a lot of other salary components such as HRA, Provident Fund, Gratuity, ESIC, etc.
are calculated as % of basic pay. e.g. Provident fund at 12% of basic pay is deducted from salary.

medical Allowance – Medical allowance is a fixed allowance paid by an employer to an


employee in form of monthly salary and employees are not required to submit any proofs for
getting the medical allowance.

Unlike medical reimbursement which is tax-free up to Rs. 15,000 per year, the amount in
medical allowance is 100% taxable.

Gross Salary – Gross Salary is the total salary that a company actually pays to an employee,
before any deductions.
It is the total of all earnings, benefits, and allowances, before any deductions for government
taxes (such as Income Tax and Profession Tax), social security schemes (such as Provident
Fund), and health insurance.

Earned Leave (EL) – Earned Leave is the leave earned by an employee after working in the
company for a certain amount of time, usually a month.

Sick Leave (SL) – Sick Leave (also known as ‘Paid Sick Days’ or ‘Sick Pay’ or ‘Medical
Leave’) refers to the number of paid leaves (employees get the salary for these leaves) that can
be taken by employees when they fall sick.

Compensatory Off – Compensatory Off, Compensatory Leave, or Comp Off, is the leave or


time off given to employees for working extra hours.

Compensation pay

Employee name   PF NO  
Employee Id   Worked days  
Designation   LOP days  
Department   Bank A/c no  
Date of joining      

Earning Amount Deductions Amount


Basic   INCOME TAX  
HRA      
Conveyance allowance      
Medical allowance      
Special allowances      
Total      

Net pay  
Amount in words  
Mode of Payment  
Total net payable  

Salary is paid depend upon their qualification and experience of the employee.
Where permanent total disablement results from the injury:--An amount equal to 60% of the
monthly wages of the injured workman multiplied by the relevant factor or an amount of Rs.
1,40,000, whichever is more.

Minimum salary at SHRC is Rs.5520(Basic DA)

Maximum salary at SHRC is Rs.85000 (Basic DA) &Rs.150000 (Gross)

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy