salary under 7th pay commission

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Vasant (Querist)
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19 April 2022 we are a educational institute and we may start 7th pay from Apr 2022
so if my question is

1) 7th pay say salary increment is 3% every year Jan or July - so do i need to calculate increments for those exist before year 2016- from 2016 to july 2021?

request you to give a example also

thanks in advance

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)
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06 July 2024 If your educational institute plans to implement the 7th Pay Commission recommendations from April 2022, and you need to calculate increments for employees who were already in service before 2016 up to July 2021, here’s how you can approach it:

Understanding Increment Calculation:

The 7th Pay Commission typically recommends periodic salary revisions and increments based on the employee’s current salary level and years of service. The increments are usually a percentage increase applied to the basic pay or salary.

Example Scenario:

Let’s consider an employee who joined your institute before 2016 and is eligible for increments as per the 7th Pay Commission recommendations:

• Employee’s Joining Date: Before 2016 (let’s say January 1, 2015)
• Increment Pattern: 3% increment every year in January or July (based on your policy)

Calculation Steps:

1. Identify the Base Salary (as of 2016):
• Determine the employee’s basic salary as of January 1, 2016.
2. Calculate Increment Annually:
• Apply a 3% increment annually from January 2016 to July 2021.
• For each year, calculate the increment based on the previous year’s salary.
3. Example Calculation:
• Suppose the employee’s basic salary as of January 1, 2016, is Rs. 50,000.
• Increment in January 2017: Rs. 50,000 + (3% of Rs. 50,000) = Rs. 51,500
• Increment in January 2018: Rs. 51,500 + (3% of Rs. 51,500) = Rs. 53,045
• Continue this pattern annually until July 2021.
4. Document and Track Increments:
• Maintain a record of each year’s increment calculation, including the revised basic salary after each increment.

Implementation Considerations:

• Policy Alignment: Ensure that your institute’s increment policy aligns with the 7th Pay Commission recommendations and any specific guidelines you have for educational institute employees.
• Documentation: Keep detailed records of each employee’s salary revisions and increments, including effective dates and amounts.

By calculating increments for employees who joined before 2016 up to July 2021, you ensure that their salaries are adjusted in accordance with the 7th Pay Commission norms, thereby maintaining fairness and compliance with government guidelines.

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