Salary Calculator

What is a Salary?

Salary is the regular payment created by an employer to his or her workers in exchange for the work performed by them. It’s paid at fixed intervals, typically on a monthly basis, and sometimes expressed as an annual sum. Salaries are typically determined by comparison what other workers in similar positions are earning within the same industry and region. In several countries, the provision and demand of resources play a serious role in assessing the salary - how many vacancies are there for a particular position as against the amount of individuals within the area who might fill that position.

Understanding Basic Salary

It is a fixed total paid to staff in exchange for the work performed by them. The basic income is derived before any reductions or increases due to overtime or bonus, allowances are created. Basic regular payment could be a fastened a part of the compensation structure of AN employee and forms the core of the salary of an employee. It does not vary, not like the other aspects of cost to Company. The full amount of the basic remuneration shall be a part of the in-hand remuneration.

Gross Salary - Definition

Gross salary is the term to describe all the money a worker has created working for the company in a year. It’s the salary that is without any deductions like tax, PF, medical insurance etc. Gross salary is but, inclusive of bonuses, overtime pay, vacation pay, and alternative differentials. A number of the elements of gross salary include basic salary, house rent allowance, special allowance and conveyance allowance, among others.

Difference between Basic Salary and Gross Salary

Basic salary is that the figure set between a company, its worker, without resolving in bonus, overtime, or any kind of further compensation. Gross salary, on the opposite hand, includes overtime pay and bonuses, however doesn't contemplate taxes and alternative deductions. Say as an example, an employee’s gross salary is Rs. 40,000 and a basic salary is Rs. 20,000. This suggests that the individual can receive Rs. 20,000 as fixed pay and also the remaining Rs. 20,000 in allowances like house rent allowance, conveyance, dearness allowance, etc.

Cost to Company (CTC)

Cost to company is that the quantity that an organization spends – directly or indirectly – in hiring and sustaining the services of a worker. In alternative words, authority may be a term for the entire salary package of associate worker. It indicates the additive quantity of expenses an employer spends on an employee throughout one year.

The various components of CTC are as under:

Net Salary

Net salary, or more commonly mentioned as take-home salary, is that the income that an worker really takes home after tax, provident fund and different such deductions are subtracted from it.

Net salary = Gross salary - income tax - Public Provident Fund -Professional Tax

Net salary is usually below gross salary. It may be equal in cases wherever tax is zero and when the salary that the worker is earning is less than the govt tax slab limits.

Difference between Gross Salary and Net Salary.

Gross salary is that the figure derived when totalling all the allowances and benefits however before deducting any tax, whereas net salary is that the amount that a worker takes home. An individual's gross salary is inclusive of benefits like HRA, conveyance allowance, medical allowance etc. net salary = Gross salary - All deductions like taxation, pension, professional tax, etc. net salary is also referred to as take home salary.