New Wage Code: On the implementation of the new wage code, those who get a monthly salary of 50 thousand rupees will get more than 60% benefit. There will be a big change in basic, gross and net salary.
New Wage Code: There is a lot of discussion about the Cost to Company (CTC) in the country regarding the implementation of the new Wage Code 2021. There is a continuous delay in the implementation of the new Wage Code. Although the Labor Ministry has completed its preparation, the draft is yet to be finalized at the level of some states. It is expected that it will be implemented by the end of this year. If this happens, then it will completely change the take-home salary, PF and gratuity of people working in private institutions.
The special feature of the new wage code is that the cash-in-hand salary of private employers will decrease, but old age will be more secure. According to experts, the monthly salary will decrease, because more money will be deducted for PF. This will give a big fund after retirement. Along with this, the gratuity will also increase.
Know- Benefits after the implementation of the new Wage Code
Talking about the current structure, whose monthly salary is 50 thousand rupees, then the basic salary will be 15 thousand rupees. After that the amount of PF on retirement will be Rs 7,14,53,72.
But, after the implementation of the new wage code, the basic salary will be 25 thousand rupees per month. Then the amount of PF on retirement will be Rs 1,19,08,953. Here the annual increment has been taken at 5 percent, due to which the PF fund will increase further.
Know- What is CTC (Cost to Company)
The expenditure incurred by an organization or company on its employee is called CTC. This is the complete salary package of the employee. CTC includes monthly basic salary, allowances, reimbursement. At the same time, gratuity, annual variable pay, annual bonus etc. are included on an annual basis. The amount of CTC is never equal to the employee’s take home salary. There are many components in CTC. Therefore it is different. CTC = Gross Salary + PF + Gratuity
What is Basic Salary
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.
Know- What is Gross Salary
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
Know- What is 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
Salary is part of allowance
The company gives allowances to the employee in lieu of the job. This 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. This 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 incentives or incentives.
Know – What is Reimbursement
According to experts, in many companies, there is a provision to reimburse the employee for treatment, phone expenses, newspaper bills. 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.
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