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3/31/21

Your take home salary will not change now, the Center postponed the decision; Preparations of some states are not complete as per the new labor law


There is currently no change in the celery structure:Your take home salary will not change now, the Center postponed the decision; Preparations of some states are not complete as per the new labor law





The decision of the Central Government to change your salary structure from April 1 has been postponed. This is because some states have said that preparations for the Labor Codes are incomplete. 4 labor laws were enacted by the Center by amending 29 labor laws. Companies were then asked to make many necessary changes to their employees, including the salary structure.


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According to sources, the new law has been postponed due to the prevailing situation. Because, in the midst of the Corona epidemic, people need cash in hand. Apart from that the main reason is that the framework is not ready. According to sources, no government notification has been issued in this regard. As a result the law was postponed.





The change in the law would have reduced your take home i.e. in hand salary but would have increased the amount of Provident Fund i.e. PF. It simply means that the government is trying to make your savings worthwhile. Last year, the government changed the number to 4 out of 29. These laws are- Occupational Security Act, Health and Work Status, Industrial Relations and Social Security Act.


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According to HR Consultant, the new law will have an impact on the employee's salary but will save more for the future. Interest rates on PF can be found between 8-8.5% per annum. Overall, this is a positive step for job seekers.

Now understand the math of celery ...
job seekers are familiar with 2 words. The first CTC means cost to company and the second take home celery means on hand celery.





1. CTC : CTC means cost to company, the total cost of the company in your work. That's your total celery. This celery includes your basic celery. Apart from this there are House Allowance, Medical Allowance, Travel Allowance, Food Allowance and Incentives. All of this is determined by your total celery found. This is called CTC.




2. Take home celery: When you have celery in your hand, it is less than your CTC. Because the company deducts some money from CTC i.e. total salary for PF. So some cut as a medical insurance premium. Apart from this, the company also cuts celery for some other things. After all these things, the celery that comes in your hand is called on hand celery.

How will the new change reduce your salary?
Those whose basic salary is 50% CTC will not make much difference, but those whose basic salary is not 50% of CTC will make a big difference. Because under these rules now anyone's basic salary cannot be less than 50% of CTC. This is because PF money is deducted from your basic salary, which is 12% of the basic salary.



That is, the higher the basic celery, the higher the PF will be. Earlier, people used to increase the allowance by reducing the basic salary from the total CTC. This was tax deductible and also reduced PF. This increased the on-hand celery. According to Dharmesh, the government had changed the rules to address these shortcomings and benefit the employees.

Let's understand it with two examples ...





According to him, this will require a bit of a problem with hiring companies as more employees are talking about salary in hand. In such a situation it may be a little difficult to explain this change to the employees. This is because if the company decides its budget before hiring, HR's responsibilities will increase throughout the process.

However once the employee understands the math there will be no problem. After all, it is in the best interests of the employee in law. Apart from that, other experts involved in the sector said that the change in in-hand salary, PF, gratuity and pay slip would affect the company's balance sheet.

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