The Perfect Salary Break-Up Doesn’t Exist

A good salary hike with growth prospect is perhaps the most important consideration for most people when changing or choosing a job. But imagine signing up for a fat salary hike and realising later that it didn’t make a lot of difference to your take-home pay. Mridul Gogoi, 46, a content writer, joined a new organisation in 2009 at a 25 per cent hike on his previous cost to the company (CTC). At the end of the first month, he was sorely disappointed when he received his pay—his take-home had increased only by 8 per cent. That was because unlike his previous employer, his new employer had no provision for allowances and reimbursements on which he could claim tax benefit. You could avoid a situation similar to Gogoi’s if you look at the salary break-up in advance and understand its components and the mandatory deductions from the human resource department (HR) before...