Calculating On-Costs: USD 10 Gross Salary

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In summary, the gross salary is 60% of the net salary, which equals to USD $6. The flight on-cost is 3% of the net salary, which is USD $0.18. The transport on-cost is 5% of the net salary, which is USD $0.30. The medical on-cost is also 3% of the net salary, which is USD $0.18. The accommodation on-cost is 22% of the net salary, which is USD $1.32. And the gratuity on-cost is 9% of the net salary, which is USD $0.54. However, the total of these on-costs is 42% of the net salary, not
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gibbon85
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Hey,

Gross Salary is USD 10 (Gross salary is 60% of Net Salary)

Flight on-cost = 3% of Net salary
Transport on-cost - 5% of Net salary
Medical on-cost = 3% of Net Salary
Accommodation on-cost = 22% of Net Salary
Gratuity on-cost = 9% of Net Salary

(On-costs total 40% of Net Salary)

How do I calculate what the USD$ value is for each of the on-costs?

Thank you so much for help, and I'm sorry if this is an elementary question!
 
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  • #2
gibbon85 said:
Hey,

Gross Salary is USD 10 (Gross salary is 60% of Net Salary)
Is this correct? I have never heard of "gross" being smaller than "net"!
Assuming you have those backward and "Net Salary is 60% of Gross Salary" then, with Gross Salary being $10, Net Salary is $6.

Flight on-cost = 3% of Net salary
3% of $6 is $0.18

Transport on-cost - 5% of Net salary
5% of $6 is $0.30

Medical on-cost = 3% of Net Salary
3% of $6 is $0.18 again.

Accommodation on-cost = 22% of Net Salary
22% of $6 is $1.32.

Gratuity on-cost = 9% of Net Salary
9% of $6 is $0.54.

(On-costs total 40% of Net Salary)
Then you have something wrong: 3%+ 5%+ 3%+ 22%+ 9%= 42%, not 40%.

How do I calculate what the USD$ value is for each of the on-costs?

Thank you so much for help, and I'm sorry if this is an elementary question!
 

1. What are on-costs?

On-costs are the additional expenses that are incurred by an employer when hiring an employee. These expenses are on top of the employee's gross salary and include items such as taxes, benefits, insurance, and other indirect costs.

2. How are on-costs calculated?

On-costs are typically calculated as a percentage of an employee's gross salary. This percentage can vary depending on the company's policies and the employee's job position. Common on-cost percentages range from 20-30% of the gross salary.

3. What is the purpose of calculating on-costs?

The purpose of calculating on-costs is to have a better understanding of the true cost of hiring an employee. By factoring in on-costs, employers can accurately budget for the cost of adding an employee to their workforce and make informed decisions about hiring and employee compensation.

4. What types of on-costs are included in the calculation?

The types of on-costs included in the calculation can vary, but typically include taxes, benefits such as health insurance and retirement contributions, payroll taxes, and other indirect costs such as training and administrative expenses.

5. Are on-costs the same for every employee?

No, on-costs can vary for each employee depending on factors such as job position, salary level, and company policies. For example, an employee with a higher salary may have a higher percentage of on-costs compared to an employee with a lower salary.

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