What is the new wage code and how is it going to impact the take home amount ?

The new wage code implemented by the state and federal government has changed the structure if the ctc. CTC is as we all know is a tricky term for a newbie and has various elements that benefit the employees. For instance, the employee receives allowances that procure towards the annual CTC package. These benefits are allocated by the organization to provide the workforce with a secure job platform. It adheres with the labor law implemented by the state and federal government which protects the employees from exploitation.

However, since the pandemic, the laws have been amended. The uncertain streak of events has made the government amend rules to protect the working population of the nation.

Let’s take a look at the impact on the take-home amount :

Basic pay

The compensation structure has been changed with the amendments has changed along with the new code. The compensation structure has ranged from 30-40 % of the gross salary. The basic pay due to the new wage code has been capped at about 50 % of the ctc amount to sum up the allowance upto 50% of the gross salary.

Provident Fund

Provident func has always been a tricky term for the each employee. The provident fund is usually calculated on employee’s basic pay, considering the DA, i.e dearness allowance offered by the employer. In accordance with the new wagbe code, the contribution of both the employee and the employer is now 50 % of the employees salary amount.

This eventually increases the PF contribution and decreases the take home amount of the employee.

Also Read: When And How To Withdraw PF Online During Lockdown?

Gratuity

Gratuity, as known it the amount that an employee receives at the final or permanent employee duration. The employee receives the amount to support in the time of crisis. For instance, if the employee faces an unfortunate event that may result in death or disablement, the gratuity amount is credited to the employee or their family members.

How is the new wage code going to impact on take-home amount after-tax deductions?

The take home amount can be reduced depending on the salary bracket the employee belongs to. The impact of the new wage code is determined to be higher for the lower salary bracket group than the higher salary group.

The basic pay for a lowered salary personal lacks in being a significant total component of the remuneration. In such cases, the deduction of the tax amount increases hampering the take-home amount.

However, the take-home amount for those who receive a significantly higher salary has an increased basic pay scale which does not hamper the take-home amount. The high basic pay can be up to 50% of the total remuneration amount.

The reason behind implementing such laws

The reason behind such amendments is stated as to provide insurance to the employees in such uncertain times. The state and federal government aims in securing retirement for millions of employees.

The elements that needs to be highlight under the new wage code for employees in their salary break-up

The new wage code in imposed in the year 2021. This is why it has many layers which needs to be read carefully before acceptance of any offer letter or changes in the CTC break-up. If any employee is looking for a job change he/she needs to understand that the breakup is updated under the new wage code of 2021.

It is imperative to pay heed to the provident fund contribution and pension schemes to remunerate for any loans or interests that need to be paid.

There are a few takeaways which can help in gaining a better insight on the new wage code :

• The take-home amount for lower-waged employees is drastically hampered, however, the employee with a higher salary bracket may not experience much difference in the amount.
• The new wage code ensures that the allowance of the CTC calculation has to include at least 50% of the gross salary of the employee.
• The new wage code has altered the calculation of gratuity and provident funds.

These are a few impacts that the new wage code can be experienced by the employees.

Why Is SMEs Investing In Time And Attendance Management Systems?

It has been more than a year now that companies across India are working remotely. A lot has happened and changed over the past year, one being people leaving behind outdated tools and embracing automation. Although technological advancements have always been here, not many considered them in the past. It was after the outbreak of coronavirus, people started investing more in automated software tools. One such tool is the time and attendance management system. A good number of businesses have shifted their focus to such systems due to various reasons.

Let’s dive in and look at some of the top reasons:

Saves Time

It is no news that attendance management is one of the most time-consuming human resource operations. Work from home has undoubtedly made this process even more difficult for companies. This is the first reason why small and medium-sized businesses are implementing attendance management software like never before. Attendance software needs a bare minimum of human intervention. HR managers just need to give the instructions, the software takes care of the rest.

Eliminates Errors

When it comes to traditional attendance management systems, they require a lot of human intervention. This in turn leads to human mistakes. Now, we all know that errors in attendance can impact payroll management as well. So, the best solution is to rely on automated attendance management systems. Since such systems are fully automated, companies can eradicate the chance of human mistakes along the way.

Empowers Employees

Another benefit of using automated attendance systems is that it helps employees to have a tab on various things. From checking their attendance to applying for leaves, employees can do a lot of tasks without having to disturb anyone in the workplace. This in turn saves a large chunk of time for both employees as well as HR professionals.

There are more but we have only discussed the top reasons why SMEs are relying on time and attendance management systems lately. Hope it convinced you to buy one for your company as well.

Also Read: Attendance Management Software, Features & Benefits that You Must Know

Here’s Why You Need Workforce Management Software

At present, we are standing in the digital age where everything is just a click away. Say, for example, an HR manager sitting in Mumbai can not just take care of the employee engagement but also know the pulse of his/her company in Delhi. Now, this has been made possible by technology.

We all know that automated software tools are taking over the business world in India like never before. More and more businesses are bidding adieu to traditional tools and embracing tools such as workforce management software. Such systems, on the other hand, are simplifying things for companies and aiding them to access information anytime and anywhere.

All that said, here are the top three advantages of relying on workforce management software:

Improves Employee Satisfaction

Dissatisfied employees can result in various other problems in the long run. Now, the only solution to keep employees satisfied is by giving them the power to do several things on their own. This is when workforce management systems come into play. Such systems empower employees to do many easy tasks such as editing personal information, request time off, check attendance and much more.

Eliminates Compliance Issues

Managing compliance records manually can not just take up a lot of space but also lead to costly mistakes. Fortunately, workforce management systems can do this on its own, that too instantly. They cut down errors and help companies to stay compliant with legal requirements.

Enhances Analytical function

Unlike outdated and manual tools, workforce management solutions allow organizations to have real-time data, compare performance against budget and more. Such systems provide the necessary information to analyze and make the right decisions along the way.

In essence, it helps businesses to succeed.

If you want to invest in a workforce management system anytime soon, go for one of the best tools for workforce management, HROne that is both affordable and efficient. All the best!