Trending @Accenture; Salary/Variable Pay Components Explained!

I have seen many people here who don't know how their salary/VP is calculated.

I'll try to explain in short how the calculation works.

Lets take a example of a person with 600k Fixed Pay and maximum VP 126k (21 % of Fixed Pay)

Salary - Total CTC includes both fixed and variable pay. Dividing the fixed pay gives a rough idea how monthly net pay will look like but that's not the case, monthly net pay includes pf contributions as well ( from employee and employer both) and that pf is 12% of basic earnings or minimum of 1800₹ ( whichever is lower) and professional tax of 200₹.

So from above example

600k/12=50k

Basic Earnings = 17.5k (35 % of 50k) 12% of 17.5k = 2.1k(pf contribution)

So net pay will be 50k-4.2k(employer & employee)-200(professional tax) = 45.6k₹

Variable Pay - It can maximum of 21%(in most cases) of Base/Fixed Pay. In Accenture VP is given two times in a year, So half of the base pay is considered for one cycle.

From above example

Fixed pay 600k

Half would be 300k

So in one cycle

21% of 300k = 63k

But its never the case a person gets 21% VP. So for the sake of reality lets take 10%

10% of 300k = 30k

So two times in a year will make it 60k

So thats make actual CTC as 660k.

Hope it clears most of the doubts.