Compensation Policy

Overview
We are a performance driven organization and our compensation philosophy aims at driving a high-
performance teaming culture and motivating our people to achieve personal and organizational success.
Our compensation philosophy is underpinned by defined principles. These principles serve as a basis for
determining the compensation structure and enable us to attract, recognize and retain today and tomorrow's
workforce to support our evolving business model.

The key principles driving our compensation philosophy are as follows:

A. Pay for performance – Recognising and rewarding employees for their contribution and differentially
investing in people who create a desirable impact on business success
B. Internally equitable – Consistent compensation principles across levels, SLs and other diverse groups.
Pay gap analysis conducted to ensure fair representation.
C. Externally competitive – Market competitive compensation ensured through participation in
benchmarking studies with other leading comparable organisations.
D. Financially responsible – Considering market factors, business conditions as well as affordability and
growth.

Eligibility
The policy is applicable to employees who are on the rolls of the organization. Below are the two types of
employees covered:

⯈ Employees hired on permanent employment

⯈ Employees hired on fixed term employment

Compensation structure
Our compensation comprises multiple components. These are covered in detail below:
A. Cost to Company (CTC) - This reflects differences in employees’ role, responsibilities, experience,
skills, geographical locations or other appropriate variables and their ongoing performance. It
comprises the following components:
a. ‘Fixed compensation’ refers to the base salary that gets paid each month
b. Cash perquisites
c. Other perquisites

Refer Annexure 1 for more details on each of these components.

B. Annual performance bonus- It is to incentivize, recognise and differentiate employee’s performance

and drive behaviours that are aligned with business objectives. It enables the organisation to share
the financial success of the business with employees, subject to performance. It is paid annually in
the month of September or stated otherwise.

Note: For Senior Managers and above, Consolidated Inventory Status (CIS) guidelines for annual
performance bonus payout shall be applicable. Refer Annexure 2 for details.

The allocation of Annual performance bonus budget will be at Management’s discretion.

EY CONFIDENTIAL
Management reserves the right to alter terms and conditions of this policy per its discretion
Eligibility for annual CTC revisions and annual performance bonus payout:
⯈ All employees who have joined the organization on or before 31 March (or stated otherwise) are covered
in the performance cycle for that year. They will be eligible for annual CTC revision and annual
performance bonus, as per individual, SL and organisation’s performance.
⯈ Further, to be eligible for annual CTC revision, and annual performance bonus, an employee should be
on the rolls of the organization and should not be serving notice period as on the date of formal
communication and disbursement.
⯈ If an employee who has been promoted in a particular performance year, resigns on or before
communication of annual revision; then he/ she will not be eligible to use the revised designation, and
will continue using the previous designation until exit.
Exceptions: Fixed-term employees are not eligible for annual CTC revision and annual performance bonus.
Articled trainees are not eligible for annual performance bonus.

Other benefits:
Below are some of the benefits that are available to employees:
A. Mediclaim Policy
B. Supporting Families of Deceased Employees Policy

Gratuity:
Additionally, on separation, employees who have completed five years of continuous service with the organization, will be
eligible for gratuity as per the payment of Gratuity Act, 1972. Some important guidelines for your reference are as below:

⯈ Gratuity is calculated as half month’s last drawn basic salary for each completed year (15/26 x last drawn basic x
number of completed years).
⯈ Completed years: Six months and above will be considered one completed year. Below six months will not qualify for
completed years.

⯈ As per the Payment of Gratuity Act 1972, whilst the statutory limit for Gratuity pay-out is INR 20 Lakhs, the Firm has
decided to increase this limit to INR 50 Lakhs. Please note the income tax exemption on gratuity pay-out is
restricted to INR 20 Lakhs per the Income Tax Act and the pay-out above that by the firm will be subject to applicable
taxes.
⯈ On death of an employee during service, the minimum years of service clause is not applicable.

Note: All information related to the compensation policy and its elements are confidential. Employees,
therefore, have the responsibility of ensuring that details of the same are not shared with any third party.

Annexures:

1: Details on components of CTC

2: Consolidated Inventory Status (CIS) guidelines on withholding of annual performance bonus payout
3: Process for compensation structuring and reimbursements

EY CONFIDENTIAL
Management reserves the right to alter terms and conditions of this policy per its discretion
Annexure 1:
Below are the details of the components of CTC, as per applicable HR Band:

Components Details
Fixed Compensation
Basic salary ⯈ Basic salary is capped at 40% of CTC or INR 253,200 per annum (whichever is higher).
⯈ All employees are eligible for this component.
House rent ⯈ HRA is 50 % of the basic salary.
allowance
⯈ All employees are eligible for this component.
(HRA)
Conveyance This is a residual value of the CTC after opting for the requisite cash and other perquisites
allowance
Differently abled employees across HR Bands will be eligible for transport exemption as per Income
Tax Act up to INR 38,400 per annum. Income tax exemption is subject to employee have sufficient
amount in conveyance allowance
Special Special allowance is capped to 10% of CTC
allowance
Statutory bonus The statutory bonus component is applicable for employees whose monthly basic salary is less than or
equal to INR 21,000. This is a taxable component that is paid along with the monthly salary.

Components Details
Cash perquisites
Leave travel Employees are eligible to reimburse the vacation travel expenses for themselves and their dependent
allowance (LTA) family members. The expenses are reviewed based on the income tax law. The allocation is as follows:
⯈ For HR Band 4, 5 and 6 - 12.5% of the basic salary or a maximum of INR 50,000 per annum.
⯈ For HR Band 2 and 3 - 15 % of the basic salary or a maximum of INR 1, 25,000 per annum.
Leave travel allowance is an optional reimbursement component, change in the option (yes or no) will
impact the conveyance allowance.
Employees whose CTC is less than or equal to INR 6 lakh will not be eligible for LTA.
For more details related to carry forward, claim, tax exemption, click here
Telephone Employees can reimburse up to three connections. Bills for one mobile connection, one landline and
reimbursement one broadband can be claimed. In case an employee does not have a landline connection, then the bills
for two mobiles and one broadband can be claimed.
Eligibility details are as below:
⯈ INR 12,000 for HR Band 5 and 6
⯈ INR 18,000 for HR Band 4
⯈ INR 24,000 for HR Band 3
⯈ INR 30,000 for HR Band 2
Telephone reimbursement is an optional reimbursement component, change in the option (yes or no)
will impact the conveyance allowance.

EY CONFIDENTIAL
Management reserves the right to alter terms and conditions of this policy per its discretion
Other perquisites
Company car HR Band 2 and 3 are entitled to the organization’s car lease scheme. While the choice of the car is left
lease to the individual, the overall cost of the car must be within the limit set, as per the HR Band.
Eligibility - Price range of the car
⯈ Manager and Associate Vice President (HR Band 3) – INR 3.5 lakh to INR 12 lakh
⯈ Senior Manager and Vice President (HR Band 2) – INR 6 lakh to INR 20 lakh
⯈ Director (client facing) and Associate Director (non-client facing) (HR Band 2) – INR 6 lakh to INR
25 lakh
⯈ Executive Director / Associate Partner (client facing) and Director (non-client facing) (HR Band 2)
– 6.5 lakh to 40 lakh
The above price ranges exclude GST, registration and road tax.
Note: Employees opting for the car lease will not be paid conveyance allowance.
House lease/ HR Band 2 and 3 are entitled to opt for an organization-leased accommodation. Details are as below:
lease deposits
⯈ HRA will be removed once the employee opts for house lease.
⯈ Housing perks will be added to your taxable income.
⯈ At its discretion, the organization will finance a lease deposit, if required.
7.5 percent simple interest will be charged to employees wherein the organization finances the lease
deposit.
Provident fund An employee’s monthly contribution is restricted to 12% of the monthly basic salary. The organization
in turn makes a matching contribution as a part of the CTC.
On joining the organization, employees have the option of becoming a member of the Employee
Provident Fund, as per the Employees’ PF and Miscellaneous Provisions Act, 1952. The option is
available if an employee meets the criteria below:
⯈ Monthly basic should be more than INR 15,000.
⯈ The employee should not be a provident fund member in his/ her previous organization.
In addition to the compulsory contribution of 12% of basic salary, an employee can also make voluntary
contributions to the fund, which has tax benefits under section 80C. However, no matching
contribution will be made by the organization with respect to the voluntary contribution made by the
employee.
National NPS is applicable for Senior and above. This contribution can range between 1% to 10% of the basic
Pension System salary.
(NPS)
⯈ To opt for NPS, employee should hold valid and active PRAN (Permanent Retirement Account
Number). In case, if employee is opting for NPS without valid and active PRAN and fails to submit
the active PRAN by March, then NPS contribution will get paid with April salary as ex-gratia post
applicable TDS.
⯈ For employees joining in the month of March and opting for NPS, contribution will commence
effective April. March contribution will get processed and paid as ex-gratia with April salary post
applicable TDS.
Please refer the EY Payroll bulletin board for more details on the scheme (Link).
Critical illness Under the Mediclaim policy, employees have an option to cover dependant parents. On such inclusion,
there will be an additional mandatory coverage of INR 10 lakh towards critical illness. Please refer to
the Mediclaim policy for more details.
Top-up premium In addition to applicable medical insurance coverage, employee can increase the coverage by enrolling
for top-up scheme. Please refer to the Mediclaim policy for further details.

EY CONFIDENTIAL
Management reserves the right to alter terms and conditions of this policy per its discretion
Annexure 2:
Withholding of annual performance bonus payout on account Consolidated Inventory Status
(CIS)

Consolidated Inventory Status (CIS) is an important indicator for our business as it quantifies the overall
outstanding percentage of the Net Engagement Revenue (NER). For HR Band 2, controlling CIS is one of the
key expectations, and the CIS percentage beyond a certain limit indicates a need to manage engagements
better.
Annual performance bonus is not discounted on account of CIS, it is only withheld where CIS is above the
prescribed levels. The withheld performance bonus is paid once CIS is cleared.
The details are as below:
Assurance/ Tax/ Consulting
⯈ This is applicable only to HR Band 2 if the outstanding inventory is above INR 10 lakh as on the cut-off
date.
‘Total inventory’ is a combination of AR and Positive WIP as on 1st July 2022 (week 52 of FY21-22) after
reducing FY 20-21 and earlier inventory.
⯈ Acceptable CIS for releasing annual performance bonus for FY22 is 20% (Tax and Assurance), and 25%
(Consulting) of NER.
⯈ CIS beyond the aforesaid limits will result in withholding as follows:
o In case of Tax & Assurance
▪ CIS between 20% to 40% = 25% of bonus withholding
▪ CIS more than 40% = 50% of bonus withholding
o In case of Consulting
▪ CIS between 25% to 40% = 25% of bonus withholding
▪ CIS more than 40% = 50% of bonus withholding

⯈ The withheld annual performance bonus will be paid with the salary of the month in which the outstanding
CIS is cleared. The cut-off date for clearing this CIS is Friday on or before the tenth of a month. If the CIS
gets cleared after the cut-off date, then the annual performance bonus will be paid along with the salary
of the following month.
⯈ WIP/AR reversal in excess of INR 5 lakh is added back, however AR write off is not considered as inventory.
⯈ Such employees will get the communication about the annual performance bonus being withheld along
with their mail communication.
⯈ Any exception needs approval from the Market Segment Leader/ Service Line Leader.
⯈ If an employee leaves the organization and his/ her CIS is above the acceptable limit, then his/ her annual
performance bonus gets forfeited unless approved by the Market Segment/ Service Line Leader.
Please note: CIS related data is shared and monitored on a monthly basis by the Internal Audit team with the
help of FMA, if required. The annual performance bonus is released basis the monthly input shared by the
Internal Audit team with Central HR.

EY CONFIDENTIAL
Management reserves the right to alter terms and conditions of this policy per its discretion
Annexure 3:
Process Action required from employees Database/ Link
Compensation Employees have the flexibility to design their own
structuring compensation structure:
⯈ Upon joining, employees are provided with the
compensation link to make requisite changes to Compensation database link
structure their compensation (only on permissible
options).
IN Compensation V1.0
⯈ During annual revisions, wherein the new structure is
released to all employees for their edits (only on
permissible options).
⯈ To understand the eligibility by HR Band wise, please
refer to Annexure A.
Compensation Employees can claim compensation related expenses GT&E
reimbursement process through the GT&E tool (Global time and expense):
⯈ Employees should refer to their compensation
eligibility report before claiming compensation
related reimbursement.
⯈ All unclaimed reimbursements (telephone and
company car lease) are processed in October.

EY CONFIDENTIAL
Management reserves the right to alter terms and conditions of this policy per its discretion