Handout 3 Prof.

Madhu Bahl You have been assigned the responsibility of payroll administration of 6 employees in your branch office. The salary structure is as follows: Basic Salary Conveyance HRA = 60% of Basic ( Percentage value 60% to be taken from cell C25 ) LTA = 20% of Basic ( Percentage value 20% to be taken from cell C26 ) Employees Contribution to PF = 8.33% of Basic Companys Contribution to PF = 8.33% of Basic Mediclaim Insurance If Basic <= 2500 (Rs 500 per month) If Basic <= 10000 (Rs 1000 per month) If Basic > 10000 (Rs 2000 per month) Gratuity One months basic salary for each completed year of service, claimable at the time of retirement. Performance Incentives 5% of Basic ( Percentage value 5% to be taken from cell C28 ) You have to keep track of leave deduction which is calculated as: [(Basic Salary * 2) + Conveyance] * No of leaves / 30 You have to keep track of advances taken by an employee over which the company charges monthly interest at discounted rate as follows: If loan amount less than amount of gratuity [4% per annum] If loan amount less than 70% of total net salary drawn [8% per annum] If loan amount exceeds above [12% per annum] Interest amount will be loan amount * interest rate. You have to prepare a system to calculate Gross Salary Package for each month =

Basic Salary + Conveyance + HRA + LTA + Companys Contribution to PF + Mediclaim + Gratuity + Performance Incentive Net Salary Package for each month = Gross Salary Gratuity Tax [Basic Salary + Performance Incentive (leave deduction)/2] * tax% Tax% 30% 40% 50% 60% Annual Net 0-50000 50001-100000 100001-200000 200001-

Total Payable Salary for each month = Net Salary Employees contribution to PF Companys contribution to PF - Tax Leave Deduction Return on advance-Interest

Create an Excel Worksheet with the following columns and enter formulas in the cells to calculate the Total Payable Salary. Enter values in the cells which are underlined. Employee Number E04 Basic Salary 20000 Conveyance 5000 HRA LTA Employees Contribution to PF Companys Contribution to PF Mediclaim Insurance Leaves 1 Leave Deduct Gratuity Performance Incentive Gross Salary Net E01 2500 500 E02 5000 1000 E03 10000 2000

Tax Loan

80000 Interest Amount Return on Advance 5000 Total Payable Salary

50000 1000

20000 2000 0