Friday, March 2, 2007

Pay checks in Indian IT, Finance and Manufacturing

Via Gautam Ghosh's blog
You can check the salaries in India at this site - PayCheck India

Some indicative figures:
Vice-President: Rs. 5,355,105.58
Project Manager: Rs. 1,710,159.99
Senior Engineer: Rs. 994,350.35
Fresh Grad: Rs. 300,000 - 400,000

I have checked with a few friends in India, and the weighted salaries on the site are very representative for IT. For Finance, it doesn't quote iBanking salaries, only insurance salaries. I have no friends who are insurance salesmen...

Some things to note
-- Most of the companies tend to quote Cost-To-Company (CTC) as the package. While in Singapore and US, the quoted package is usually your basic salary.
CTC includes [Basic + Allowances + Loan opportunity costs + Retirement benefits + Variable pay (!!!)]

-- Having said that, the allowances are a core part of the salary which will ALWAYS be given. They are just a structured way to give the employee more money outside the basic salary.
So if there is a taxi allowance of Rs. 50k as part of the package, the employee will always get 50k. Plus extra taxi reimbursement every time a taxi is taken after 9 PM. This is different to Singapore where the taxi claim is an actual reimbursement.
Rationale: Basic salary is kept low by shifting more salary to allowances. So retirement benefits paid are low, as they are a % of the basic.

-- Tax rate in India is 33% at the high end. But the tax code was formulated long long long before the IT boom, when a Rs. 300,000 package was considered for CEO's. Anything over Rs. 250,000 is taxed at 30%.
(Source: finance@Indiamart)
110,000 = NIL
100,001 - 1,50,000 = 10%
150,001 - 2,50,000 = 20%
250,001 upwards = 30%
1,000,000 upwards = 33%

Compare this to Singapore:

Chargeable Income ($)

Rate (%)

Gross Tax Payable ($)

On the first
On the next

20 000
10 000



On the first
On the next

30 000

10 000



On the first
On the next

40 000

40 000


3 400.00

On the first

On the next

80 000

80 000


4 300.00
11 200.00

On the first
On the next

160 000

160 000


15 500.00
27 200.00

On the first

320 000

320 000


42 700.00

So, if you have a package of S$ 100,000 = Rs. 28 lakh
Income tax in Singapore = S$7100 = Rs. 1,98,800
Income tax in India would have been Rs. 8,66,500 for same salary

How to Compare
-- Trying to understand the Indian CTC structure on the above website is a total waste of your time. You will get it wrong.
-- So better to modify your overseas package to suit the CTC structure without the loan component. There is a [Total Remuneration - Loans] CTC figure on the PayCheck site.
The corresponding overseas package is your [Basic + Always-paid allowances + Average bonus + Retirement benefits - Income tax]. Do not count medical benefits etc as the overseas and Indian benefits cannot be easily compared. Also, these are a very very small part of the Indian CTC package.
-- After this you might want to compare the retirement benefits alone. This will give an understanding of the take-home pay

Special Cases
MSFT starting salary:: ~ Rs. 1,000,000
Google India starting salary:: ~ Rs. 1,300,000

Reading is fundamental
Salary "survey" at In Hyderebad blog
Salary figures at R2I blog


Anonymous said...

How much does Microsoft and Google actually pay (not CTC) but cash in hand - for a fresh grad?

Arun said...

It is difficult to figure that out unless the breakdown of the CTC figures is known.

Better to go to India site, and configure a similar profile to see if they have some data

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