COST OF LIVING AND SALARY
August 10, 2009
DOES COST OF LIVING IMPACT THE SALARY?
Cost of living definitely differs from a person who is getting more salary than the one getting less, because their spending patterns completely depends on the salary that they get. Also other reasons also influence the cost of living based on people￢ﾀﾙs commitment in their life. (For e.g. same salary for an single person and for a married one)
￢ﾀﾜCost of living￢ﾀ? definitely influence the salary of working people but it￢ﾀﾙs not in the case of IT industry-reports says, as the industry continues to boom i.e. the Growth rates are high.
Employees pay depends on the cost of living because their compensation structure completely depends on the consumer price index. So planning of income tax and with income tax rules is very essential. ,inflation is also another serious impact give to the pay package of employes.
Increase in the cost of living is not mainly because the kind of pay IT professionals get
Because even a low payed employee can survive in the society if he opts to go to a low cost of living area.
Low cost of living means buying power is high in that area.
Increase in the cost of living is mainly calculated using the consumer price index. This consumer price index measures inflation in rent, food items and other earnings etc￢ﾀﾦ
The other factors that influence the pay is like ways to retain a talent i.e. increasing the pay of employee based on his contribution to the organization. When employees salary is been revised its mainly done based on the current cost of living trend that exists and also based on employees personal life and standard of living.
Sometimes the geographical locations also make a huge difference in the standard of living or the cost of living or whatever, an IT professional pay does not differ from region to region, wherever he goes mostly his/her pay is the same. Only some organization has taken the initiative to maintain the standard of living of their employees, but off course they won￢ﾀﾙt reduce the salary at any circumstances for this.