Salary structure and CTC design in Pitch N Hire HRMS

What salary structure includes

What does CTC mean when you are designing a salary structure?

Cost to company is the total annual cost of employing a person, and in Pitch N Hire it is a computed figure rather than a number somebody types. It sums every head attached to that employee: fixed monthly earnings, allowances, reimbursement entitlements, employer contributions to statutory funds, benefit costs the company bears, and the variable pay the role is eligible for at target. Because it is derived, changing one head updates the total and every downstream figure at once, from the offer to the payslip lines to the accounting split. The distinction that matters when designing a structure is that cost to company is not take-home pay: employer contributions and employee deductions sit between the two, and the gap between them is what a candidate usually asks to have explained. Pitch N Hire shows both views on the same structure, so an HR team answers that question without rebuilding anything in a spreadsheet.

How do you build a salary structure template in Pitch N Hire?

A template is defined once for a grade, band or location and then assigned to everyone who fits it. You add the earning heads it carries, and for each one set how it computes: a fixed amount, a share of another head, a slab that varies by band, or a value entered per employee within limits you define. Deduction heads and employer contribution heads attach the same way. Every head carries its own attributes, including whether it forms part of the statutory contribution base, whether it counts toward the gratuity base, which accounting head it posts to, what label appears on the payslip, and whether an employee may vary it. Assigning the template computes a person's whole structure from their band and their entered values. Templates are versioned, so a change introduced for new hires leaves people on the earlier version alone until you deliberately move them across.

What is the difference between monthly CTC and annual CTC?

Monthly cost to company is the annual figure spread across the pay periods of the year, but the two behave differently in practice and Pitch N Hire keeps them separate. Some heads accrue monthly and are paid monthly, such as basic pay, house rent allowance and most fixed allowances. Others belong to the annual figure yet are paid on their own schedule: an annual bonus, a retention component, a benefit renewed once a year, or a reimbursement entitlement claimed against bills as they arise. If those are spread evenly across the months and shown as monthly pay, the payslip stops reconciling with what reaches the bank. Each head therefore carries its own payment frequency and basis, and the structure view shows the monthly total, the annual total, and which components sit only in the annual figure. That same breakdown is what an offer letter draws on, so a candidate is told what payroll will later compute.

How do you split fixed pay, variable pay and employer contributions?

Three layers make up the cost of a role and they behave differently at run time. Fixed pay is contractual and computes every cycle regardless of performance. Variable pay is eligible-at-target rather than earned: it sits inside the annual cost figure, is released against a payout cycle and an achievement input entered per employee or imported from goals and OKRs, and computes only in the run where it is released. Employer contributions are neither, being a cost the company bears that never reaches the employee's bank account, computed from the heads you have marked as forming their base. Pitch N Hire keeps the three visible as separate blocks on the structure, so a compensation decision is made with the full cost in view and the payroll register can report contractual cost, discretionary cost and statutory cost apart from each other. The payroll cost calculator models a band before you commit to it.

How are allowances and reimbursement heads set up?

Allowances and reimbursements look similar on a structure and behave very differently in a run. An allowance is paid with salary whether or not the employee spends anything: it computes each cycle from the structure and appears on the payslip as an earning. A reimbursement head is an entitlement instead, an amount the employee may claim against bills within a period, so it computes only what has been claimed and approved, and any unclaimed balance either lapses or carries forward according to the rule set on that head. Pitch N Hire holds the entitlement, the claims raised, the approvals and the paid amount against the same head, so the balance an employee sees in self-service is the balance payroll will honour. Claim routes, document requirements and approval levels are configured per head, which is what lets a fuel or device head demand a bill while a broad allowance does not.

How do you configure components so tax treatment is applied correctly?

Component design has tax consequences, and the software's role is to apply the treatment you configure rather than to decide it for you. Each earning head carries a tax attribute: fully taxable, exempt subject to conditions, or exempt against proof. Heads set as exempt-against-proof leave the taxable base only when the employee's declaration is supported by an accepted document, which is what connects structure design to the declaration and proof workflow described in statutory compliance. Because the attribute lives on the head, adding a component next quarter means setting its treatment once and every later computation follows it. What is exempt, on what conditions and up to what limit is determined by the Income Tax Department and changes between years, so the configured treatment is something to review at the start of each financial year with your adviser. The software makes no such determination on your behalf.

How do salary revisions and effective dates work?

A revision is an event with a date, not an overwrite. You raise it against one employee or a group, choose the new template or the new values, and set the effective date, which may fall earlier than, inside, or after the current period. Pitch N Hire holds the old and the new structure side by side, shows the change per head and the change in total cost, and routes the revision for approval before anything takes effect. Approved revisions are stored as history against the employee, so their structure on any past date is retrievable rather than inferred from memory. Letters generated from a revision draw their figures from that record, which is why a revision letter and the next payslip agree with each other. Annual cycle revisions are uploaded in bulk and previewed as a group, with the same per-employee detail available for anyone who queries their own letter.

How does a backdated revision produce arrears?

A revision whose effective date falls in a period already paid produces arrears, and Pitch N Hire computes them instead of asking anyone to work them out. The engine recalculates each affected past period on the structure that was in force and again on the new one, then takes the difference for every head, including the statutory deductions and employer contributions that move with it. The net difference is carried into the next open run as arrear lines, each tagged with the period it belongs to, so a payslip separates current earnings from correction. Recoveries work identically when a change reduces pay. Because an arrear is derived from a recomputation rather than from a typed figure, it reconciles against the register for the original period, which matters when those months are later reviewed for a filing. See payroll runs for where arrears enter the cycle.