Exercise on pay monetization calculations

All students should bring the two hard copies sheets to class (One Word and One Excel –
provided in soft copy). They will need to calculate the monetized salary and benefits from
the information given below. Everyone should try and bring their laptops to the class as the
teacher would like to explain the workings of excel formulas used in the exercise; those who
do not have laptops MUST bring calculators.
Monthly Pay (Pak Rs. Per month)
Monthly pay Amount
Gross Salary 100,000
Basic Pay To be calculated
House Rent 40% of Basic Pay
Conveyance
See policy for Car
Allowance
COLA 5,000
Utilities 7.5% of Gross Pay
Perquisites and Fringe benefits
S. No Benefit Cost to company
a. Medical: Self, Spouse & Children Rs. 15,000 per employee
b. General Insurance Rs. 3/1000 of 24 GP = pm cost
c. Mobile Set + Subscription Rs. 12,000 (2 years) + Rs. 2.5k pm
d. LFA Rs. 3 Basics per annum
Paid at Eid ul Adha: One Basic;
e. Bonus
X’Mas: One Gross
f. Flexible Hours – Core 11 am – 3 pm Rs. 5,000 pm
g. Parking Space Rs. 3,000 pm
30 Times GP, payable over 20 years, 4%
h. Loan
interest, Com rate 10%*
i. 25 Day Annual Leave-BP To be calculated
j. Leave Encashment One and a half Basic
k. Paternity Leave for father One week
l. Special Leather Chair One Basic – Depreciate over 2 years
m. Food KFC Voucher – worth Rs. 350 daily
n. Club Subscription Rs. 1,000,000: Dep over 7 years.
Terminal Benefits
Element Cost to company
PF: 10% of gross pay To be calculated
Gratuity: One month basic per annum To be calculated
Ca & Fuel policy
Car: Cost Rs. 1,500,000 Dep. over 5 years, Buy Back 15% of Original Value. Disregard interest.
Fuel Max 300 litres pm @ Rs. 100 pl
• Annuity rates pm for 1,000,000 over 20 years: 10%=Rs. 9,650, 4%=Rs. 6,060,
Calculate: 1) Monthly and yearly monetized pay.
2) Review - Cash/Total Compensation Ratio. Comment.
3) What is the net pay? After tax (PKR 15,000) and PF.
4) What amount is transferred to bank every month? At Bonus Times?