Everyday, we are hearing the packages of 2.1 crores, 1.5 crores and 75 lakhs these days in IIT campus placements. Do they really offer that much? Well, Let us take example of one companys package, which claims to offer the highest package of 1.75 crores in various media articles. I gathered that they are offering $129,000 (80 Lakhs INR) salary & 4000 stocks ($42 => 2600 INR per share currently). The biggest problem in this calculation is that all the stocks are added immediately in the package, while in reality, it is granted for the period of four years (typically with 1 year cliff clause, i.e. one get 25% at the end of the year). So any sane person would add only 1/4 of the stocks value in yearly salary calculation. Again, share prices are subject to the market risks, and whatever be the share price after the vesting date, would really matter. Even in this $129,000 cash, there will be $5000 joining bonus & $10000 relocation bonus, while your real fixed salary might be $114,000. Real annual recurring cash: $129,000 + 1000 * $42 - $15000 = $156,000 Which by all means is a great salary for a fresher in US, but sadly it is around .97 cr package in US (California) instead of 1.75/1.8 cr package which is given in media. In California, you have to pay 30% US federal taxes & 10% ca state tax, you are still going to make around $94,000 USD post tax. Great, but wait, you need to shell out at least $2000 USD per month for 1BHK apt, so you are left with only $70,000 USD => 43 lakhs (per annum, which has around 15 lakhs pa from stocks). You need to spend money in buying a car, India trips and entertainment, and then you should not expect to save more than 20 lakhs p.a in the end. So without a working spouse, you can not even afford to have a decent nanny ($2000 per month) for your kids or a private school fees on your personal income. In reality, maximum domestic package by tech companies are around 25-30 lakhs (some finance companies add lots of variable component to inflate it up to 40 lakhs). So, what we hear is CTC (Cost to Company). This include bonus, insurance, relocation cost, stock option and other perks. And there will be tax cut around 30 to 40%. Actual in hand salary will be around 40 - 60 lakh rupees per year. Source: Quora.
Posted on: Wed, 10 Dec 2014 06:04:32 +0000
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