When was the last time you analysed your Salary Structure? Do you still feel as excited as you did when you last looked at your pay slip?

CTC could have been very attractive for joining a job. Have you ever questioned why your pay structure comes to you before your pay check? The employee is responsible for understanding the remuneration offered so that they can analyse their income and possibly organise their expenses, savings, and tax planning. To help someone understand the money they get, a compensation structure is offered. In other words, it facilitates the careful distribution of funds to cover your necessities and the use of the surplus to build assets. For more information, keep reading.

A salary structure gives the details about the components and ways to utilise and allocate it. The employer creates a pay structure on the company’s behalf while taking the employee’s requirements into account. So, effectively utilising the salary components towards savings, investments, tax implications, a retirement plan, etc, is therefore your responsibility.

Allowances, one of the major components can be wisely allocated to direct the expenses incurred in day-to-day life of an employee. Allowances can be classified into Flexible Benefit Allowances, House Rent Allowances and Special Allowances. The flexible benefit allowances include:

• Leave Travel Allowance,
• Gadgets & Electronics,
• Office Wear,
• Food & Provisions,
• Health & Wellness,
• Communication,
• Books & Periodicals,
• Learning & Development.

Did you know your allowances can be broken down into these categories? Do you realise that these categories help us with tax planning? Why to pay more taxes when we can avail more exemptions. Let’s be more financially aware. Smart expense management can help you organise your current financial situation and secure your future. However, tax planning is essential. Have a look at your pay slip right now, it might make a difference.

Disclaimer: The content shared in the above blog is only for informational purposes. While every step has been taken to validate the contents of the blog, the author or the company (Figital Technologies Private Limited) cannot be held responsible for the same. For tax related matters, please contact your tax consultant for further advice/ information.