New Wage Code: Take home salary, PF and Gratuity of a private job worker will change completely. In this code, the cash in hand salary of the private employer will be reduced.
New Wage Code 2022: There is a lot of discussion about Cost to Company (CTC) in the new Wage Code. If sources are to be believed, the new Wage Code will come from April 1, 2022. The Labor Ministry has made preparations for this. If this happens then it will completely change the Take Home Salary, PF and Gratuity of the private job worker. In this code, the cash in hand salary of private employers will decrease, but old age will become more secure. According to experts, if the monthly salary is reduced, then there will be more deduction in PF. This will give a big fund after retirement.
Understand the calculation here
New Wage code PF Benefits: If the monthly salary is 50 thousand rupees and the basic pay will be 15 thousand rupees. Then the amount of PF on retirement will be Rs 69,97,411.
In the New Wage Code, the basic salary will be 25 thousand rupees per month. Then the amount of PF on retirement will be Rs 1,16,62,366. Here the annual increment of 5 percent has been taken, due to which the PF fund will increase further.
What is Cost to Company
New Wage code benefits: CTC is the expenditure incurred by a company on its employee. This is the complete salary package of the employee. CTC includes Monthly Basic Pay, Allowances, Reimbursement. At the same time, products like gratuity, annual variable pay, annual bonus are included on an annual basis. The amount of CTC is never equal to the employee’s take home salary. CTC has many components so it is different. CTC = Gross Salary + PF + Gratuity
Basic salary
PF Calculator New Wage Code: Basic salary is the base income of an employee. It is fixed based on the level of all the employees. It varies according to the rank of the employee and the industry in which he is working.
Gross salary
PF Calculator New Wage Code: The salary which is made by adding basic pay and allowances without deducting tax is called gross salary. This includes bonus, overtime pay, holiday pay and other itemized allowances.
Gross Salary = Basic Salary + HRA + Other Allowances
Net salary
Net salary is also called take home salary. The salary that is made after deducting tax is called net income.
Net Salary = Basic Salary + HRA + Allowances – Income Tax – EPF – Professional Tax
Allowances
PF Calculator online: The company gives allowances to the employee in lieu of the job. It may vary from company to company.
> HRA : House Rent Allowance is given to the employee in lieu of the house on rent.
> LTA : LTA is the cost of domestic travel to the employee. It does not include food, hotel fare.
> Conveyance Allowance: Conveyance allowance is given to the employee in lieu of the expenses incurred in going home from office.
> Dearness Allowance: DA is a living allowance. It is given in lieu of inflation. Its eligible are government employees and pensioners.
> Other allowances include special allowance, medical allowance and incentive or incentive.
Reimbursement
PF Calculator New Wage Code: According to experts, in many companies there is a provision to reimburse the employee for treatment, phone expenses, newspaper bill. This amount is available separately from the salary. But only after paying the bill. Under the Income Tax Act, every reimbursement is tax exempt up to a limit.
