High Pay Package - But what is Real Salary


The high compensation promised by the Employer often comes down by 25% When the salary is credited to your salary account after a month. For example When a software engineer offered a annual salary of 3.5 lakh INR, he is expecting about 25k INR as his/her take home pay after deducting tax and provident fund. But his /her assumption comes down to ground when actual salary is credited to accounts and it is far less than what he had projected.

The next day he/she went to office with his/her offer letter and salary break-up and discussed it with the Finance department and found that Company have included the Telephone reimbursement, Petrol reimbursement (Conveyance Allowance) and Meal Coupons in the package i.e. reducing the take home salary. Reimbursement will only occur when bills are submitted.

One of the important component in salary slips is HRA , House Rent Allowance. Like to know more about it then visit House Rent Allowance Confusions.
Nowadays companies introduced a component known as Bonus or Variable component. It is about 10-20% of CTC and known as Perfomance linked bonus(Employee performance and  Company growth). At the end of year what you get in hand is 65-80% of the figure that was quoted as part of CTC.

Also one important component in Salary break-up is the Provident fund which is 12% from your basic salary. Companies have already begin including the matching  contribution to be made by them as a part of CTC.

So Next time whenever you hired by any Employer with an attractive package, Always look for the salary break-up and discuss it with the concerned person.

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