WHAT IS PAYSLIP COMPONENTS AND WAGE COST

Staff Costs – A Brief Analysis

1. Total Staff Costs

‘Total Staff Costs’ include Salaries and Allowances, Incentives, Bonus, Overtime Wages, Superannuation Benefits (PF, Gratuity, Pension including Commuted Pension), Leased Accommodation, Monthly Conveyance, Furniture, Newspaper and all other Staff Welfare Measures (Entertainment/Medical/Holidaying & Travel etc.).  Thus, it is akin to ‘Cost to the Company’ (CTC) concept i.e. cost incurred in keeping a person on the bank’s payrolls.   For the year ended 31-03-2007, the total staff costs amounted to Rs.27,520.00 Crores.

2. Total Establishment Costs

‘Total Establishment Costs’ include Staff Costs as described above and in addition, rent, electricity, depreciation and repairs on premises, vehicles and furniture (including Computers, ATM, Printers, Fax, Networking Systems and other Office Equipments).  Thus, establishment costs are much higher than staff costs.  

3. Total Wage Costs

‘Total Wage costs’ include Monthly Pay & Allowances paid to staff in service, monthly pensions and other benefits which are fixed in nature and paid every month unlike other staff costs.   Cost of wage bill for FY 2011-12 was put at Rs.56,292 crores.  Total Wage Costs were Rs.27,520.00 Crores for the year ended 31-03-2007.

4. Pay Slip Components

This is the most important part of all. Because, basing on this only, all others are decided.  ‘Pay Slip components’ include monthly pay and allowances, as reflected in the pay slip (on the left side) of individual employees.  Of the pay slip components, the Basic Pay and any other pay or allowance that ranks for superannuation benefits (PF, Gratuity and Pension) are very important and crucial in any wage revision. 

IBA itself has openly admitted now (through its Press Release dated 02-12-2014) that 11% increase in pay slip components is equal to 12.5% increase in total balance sheet costs.  Believing this is correct, it translates to Rs.7,036.50 Crores (In 9^th BPS, the amount of hike was Rs.4,816.00 Crores).   

Rider:

What was Rs.4,816.00 Crores as on 30-09-2006 (the reference date on which D.A. was merged with Basic Pay in 9^th BPS) is equal to Rs.7,590.02 Crores, if converted to prices as on 30-09-2011 (the reference date on which D.A. is proposed to be merged with Basic Pay in 10^th BPS).

                                                                                         Pannvalan