New Wage Code: New Wage Code is going to be implemented in the country soon. After this, the take home salary, PF and Gratuity of the private job will change completely. In this code, the cash in hand salary of the private employer will be reduced, but big funds will be collected in the account.
New Wage Code is expected to be implemented in the year 2022. Let us tell you that till now 90 percent of the states have prepared the draft rules. There is a lot of discussion among the employees regarding this new rule. Cost to Company (CTC) is the most discussed in the new wage code. If this rule is implemented then it will bring a big change in Take Home Salary, PF and Gratuity of the private job worker. Experts say that after this the monthly salary will decrease but more funds will be ready in EPF. This will give more money on retirement. Let’s see its full calculation.
How will the calculation be done in the New Wage Code?
According to our partner website Zee Business, if the basic salary in the New Wage Code is Rs 25 thousand per month, then the EPF amount on retirement will be Rs 1,16,62,366 at the rate of 5% annual increment. This will increase the EPF fund further.
PF Benefits in New Wage CodeÂ
If someone’s monthly salary is 50 thousand rupees and his basic pay is 15 thousand then the amount of PF on retirement will be Rs 69,97,411.
New Wage code: Cost to Company
Actually, the expenditure incurred by a company on its employee is CTC, and this is the entire package of that employee. This includes monthly basic pay, allowances, reimbursement. At the same time, products like gratuity, annual variable pay, annual bonus are included on an annual basis. Let us tell you that the amount of CTC is never equal to the employee’s take home salary. Take home salary is less than this. There are many components in CTC – CTC = Gross Salary + PF + Gratuity
basic salary
EPF Calculator New Wage Code: Basic salary is the base income of an employee.
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. But it is not take home salary.
Gross Salary = Basic Salary + HRA + Other Allowances
How much will be the take home salary?
It is worth noting that the salary that is made after deducting the tax is called net income. Understand here-Â
Net Salary = Basic Salary + HRA + Allowances – Income Tax – EPF – Professional Tax
What allowances are included
1. HRA: House Rent Allowance is given to the employee in lieu of the house on rent.
2. LTA: LTA is the cost of domestic travel to the employee. This does not include food, hotel fare.
3. Dearness Allowance: DA is a living allowance. It is given in lieu of inflation. It keeps increasing from time to time.
4. Includes special allowance, medical allowance and incentive or incentive.
These allowances are also included
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.Â
