HomeBusinessIncrease Your Take-Home Pay With This Simple Trick; how to check

Increase Your Take-Home Pay With This Simple Trick; how to check

Working professionals always want to maximize their take-home or in-hand pay. Employees often get 20 to 30 percent less salary than their gross pay due to various deductions like EPF contribution, reimbursement structures and income tax deduction. Take-home pay or salary in hand is also called the net salary that an employee receives in his account.

So if you want to increase your take-home salary without investing much, you can do it with minor changes in your salary structure. You will need to contact your HR or payroll department for this. According to the rules of the government, 12 percent of your basic salary is deducted every month in the Employees’ Provident Fund (EPF).

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Suppose if your basic salary is Rs 20,000 per month, then your EPF contribution for the month will be 12% of 20,000 which is Rs 2400. The employer will have to contribute 8.33% and 3.67% to the Employees’ Pension Scheme (EPS). EPF. So, 3.67% of Rs 20,000 comes out to Rs 734. Since employer’s contribution is often a part of employee’s CTC, it means total EPF deduction from your salary in this case would be Rs 2400 + Rs 734 = Rs 3134.

Now, the government has made it mandatory for a person with a minimum wage of Rs 15,000 to be a part of EPF. So, the mandatory EPF deduction is 12% of Rs 15,000 which is Rs 1800. Thus, if your basic salary is Rs 20,000, as in the above case, you can still opt for a minimum EPF of Rs 1800. This way, you can reduce your EPF contribution and increase your take-home pay.

Read also: EPF interest rate at a 40-year low! Should you opt out of EPF? Profit, Loss Check

Another way to increase your take-home pay is to restructure your reimbursement components, if any. However, like EPF, this too will reflect on your tax liability and you may have to make some tax-saving investments.



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