CCA Full Form
CCA Full Form-What Is CCA? CCA is an allowance provided by companies, (public sector or private sector), to its employees to compensate for the higher cost of living in metropolitan cities.
|City Compensatory Allowance|
FAQs About CCA
CCA is a way to incentivise employees working in metropolitan cities in India. According to the existing law in India, the employees of the companies, if hired by the companies, is exempted from paying the "total wage" i.e., the total amount to be paid to the employees, including basic salary, dearness allowance, gratuity, leave encashment/ provident fund. The cost of living in metropolitan cities like New Delhi, Mumbai, Bengaluru etc, is very high. In case of Chennai, Hyderabad etc, the cost of living is comparatively low. So the government allows the companies to pay the difference between the basic salary and the total wage in metropolitan cities to employees, in lieu of the difference.
The aim of compensation under CCA is to compensate for the gap in the pay and costs incurred due to transport, higher education, food, etc. by employees in metropolitan cities compared to those in other areas
CCA is calculated as a percentage of the employees salary, which is generally paid as lump sum on the last working day of the month. It is recommended that all employees should calculate their CCA while taking the basic salary into consideration, as most people don't know the exact number of CCA they are entitled to. But some companies calculate it automatically based on the salary.
For example, if the monthly salary is Rs 15,000, then the CCA calculated should be Rs 1,000 for every Rs 500 of salary. If this formula is adopted, then all companies provide CCA as part of the salary. For example, if the monthly salary is Rs 15,000, then the CCA calculated should be Rs 1,000 for every Rs 500 of salary.
CCA was introduced in 1965 under The Government of India Payment of Salaries Act, 1965 by then Prime Minister Indira Gandhi Who started it? Dr. Rangarajan, who was then the union rural development minister introduced CCA as an incentive to government employees working in rural areas. What are the benefits? The CCA is given for the services provided to the rural people. This allowance helps in curbing poverty. The median rural income was Rs 1,775 per month in 2011-12, according to the latest GDP estimates.
CPF members Registered Health Benefits Scheme (RHBS) member Employees of Corporates or Institutions (GICs and all other exempted institutions) Civil Servants Spouses of CPF members Non-working dependents (children) CSR participants What are the details? You can get CCA on a monthly basis for you dependents. The number of dependents you can claim for is dependent on your CCA registration. For those of you, who have a spouse and two dependent children and want to claim for only one of your children, then you can get up to one dependent per family. However, if you are entitled to more than one dependent, the total number of dependents you can claim for is capped at four. So, this is a flat benefit for you.
Compensation of an employee is crucial as their contribution to the society and their expenses are the same with you. It is for you to decide how much you should be paying your employee, based on the qualities they bring to your organization.