While changing jobs you must ensure that get all your pending salary dues along with gratuity dues, if any. One should also consider tax implications on issues such as premature withdrawal of PF accumulation.
Are you looking for a job change or already in the process of joining a new company? Job change is a continuous process with all organisations making fresh hires and relieving old employees.
You might be one of those on the lookout for better options in life or are being forced to look for a new job due to various reasons such as bad work environment, inadequate pay or a bad boss.
However, do you know what all things you should keep in mind, especially money matters, while shifting to a new employer? One of the main things during a job change is to go out on good terms with the employer whom you are bidding goodbye to. “Do not burn bridges at the last organization. Leave with grace and retaining goodwill,” Anil Rego, Founder & CEO of Right Horizons, advises.
He points out that with job changes being frequent you may find that your old colleagues may join you at the new organisation. This is especially true of specialised trades. “Your old junior may become your boss, or last boss may become a junior,” Rego says.
Here are the 5 things Rego wants you do when during the shift:
Get all pending salary dues: You are entitled to salary for the notice period till the day of your departure, as well as the proportion of annual benefits not taken. These include leave travel allowance (LTA) and bonus or incentives. In addition to the usual deductions that are made from your monthly salary towards profession tax, income tax, provident fund, you may also have a deduction for notice period not served. Let experts at TaxSpanner guide your way to a tax effective job change. Avail Tax Optimizer Now!
Ensure you get your gratuity dues: If you have stayed at your job for 5 years gratuity is a right you have. This is half months basic plus DA based on the last drawn salary for each year of service.
Get proper severance package if laid off: Depending on the terms of your exit you may also receive a severance package. A severance package or compensation is paid especially if you are laid off by the firm due to a merger with another.
Create an emergency fund: An emergency fund is vital for everyone. It is recommended that you set aside at least 6 months of normal expenditure for the family. During a job change it may be prudent to consider a larger emergency fund as the new employment would normally have a notice period. Chances of the new position not being satisfactory for the employer or employee are relatively high during the early days and may lead to separation.
Get a no-dues certificate: Get a no-dues certificate and reference certificate, though the latter is seldom of any worth as employers and recruiters verify the character of target employees.
Sudhir Kaushik, Co-founder and CFO, Taxspanner, says one should keep the tax element also in mind. “There are instances when employees leave the job for a new job without considering the tax angle. For example, withdrawal from provident fund (PF) before 5 years makes it taxable. Also often notice pay deduction is effected from salary payable but not taken into consideration in tax computation. One should see the hard earned money is not wasted in haste,” Kaushik says.
He also says one should be adequately insured. “Many companies provide insurance – life and medical – to employees as well as family. While switching a job these benefits might go or get reduced. Hence, one should have adequate insurance on their own,” Kaushik said. Let experts at TaxSpanner guide your way to a tax effective job change.
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(As Published in Money Control on Mar 07, 2017)
