The first rule is not to tell the employer the salary you want. Delay this discussion as long as possible. When you are asked for a target salary, deflect the question by sharing that you prefer a carnivore role over salary. If the interviewer insists, say that you are looking for a reasonable offer. Next say that the company is in a better position than you to evaluate the value you bring. Once the employer mentions their first offer, you can close the discussion if you’re happy or continue working toward a higher number.

Use Pause to Advantage

When the other person makes the first offer, respond with a pause. When you buy time to think, there is pressure on the other person to explain the reason for the offer or say something better. It explains what is important to them and what you can focus on. A delayed response usually translates into a higher offer.

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Be flexible about how much cash you can earn compared to other benefits available. Always ask about the perks that employers are willing to pay Work. Group health insurance is important now. Find out if this will cover your parents as well.

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steadfastness

Never give up in conversation. If you’re told this is the maximum basic pay for the role, ask for a sign-on bonus and a pay increase after six months instead of one year. Push back next to ‘No’ but give your reasons for the increase each time. If a discussion closes without a conclusion, reconnect in two days to take it further. This could earn you flexible working hours, health insurance for parents or even better variable bonuses.

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closing strategy

When you have several fronts to negotiate, such as salary, designation, bonuses, perks or reimbursements, initiate discussions in parallel so that the employer gets the full picture rather than assuming that you are only interested in one thing. Always start with a higher number than what you want to have room to accept later.

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Do not rush

Do not accept or decline an offer immediately. The former leaves money on the table that you could have received, while the latter deprives you of additional perks that could make the offer worthwhile. Also, always get the offer in writing. No reasonable employer will deny your request for a written offer. If they refuse, ask other employees at the firm about standard practices or reconsider your risks.

Don’t let tax get into your income

You may have been offered an attractive compensation package, but the take home pay will be reduced by deductions and taxes. Sudhir Kaushik of TaxSpanner is looking at how one can reduce the break-up and deduction of the Rs 12 lakh package.

Candidates who get job offers are very excited when they get their appointment letter. But this joy often turns into a panic at the first paycheck. The net amount is usually much less than what they expected. Deductions and taxes can reduce the compensation package of Rs 1 lakh per month by up to 28%.

Many components of the package will not be paid to you every month. You are not paid for the cost of medical and life insurance. You will also not get the company’s contribution to the provident fund or gratuity amount. In fact, your own contribution to the Provident Fund (12% of Basic Pay) will be deducted from your salary and credited to your account. If the bonus is paid annually, then this amount also will not reach your bank every month.

There will be a big cut in tax. If you live on rent, you can claim tax exemption for House Rent Allowance (HRA). Individuals can reduce their taxable income up to Rs 1.5 lakh by investing under section 80C. But the new earners do not know the rules and do not have any tax saving investments, so their companies tax HRA and take into account only provident fund contribution while computing their tax liability.

In the examples below, Employee A does not pay rent, so his HRA is taxed. Employee B claims HRA exemption but does not save under section 80C. The employee C optimizes his tax by claiming HRA exemption as well as deduction of Rs 1.5 lakh under section 80C and Rs 50,000 by contributing to NPS.

But this is not what the person will get every month. Deduction and tax will reduce net take home pay. However, tax implications can be minimized by planning wisely.

Most companies explain the CTC structure, which is the total expenses an employee incurs in a year. Salary is a major (but not the only) component of this amount. But in their excitement to get the job, new recruits don’t examine the offer letter in detail.