Hi Friend’s, any body can tell me hoe to calculate Dearness Allowance. Is there any fix % of Salary. or it varies from city to city. Thanks, Akanksha
You must understand the basic concept of dearness allowance. It is a payment towards the rise in cost of living, which is calulated based on cost of living index.
As regards the minimum wages, the State government or the central Government makes a notification and payment is to be made.. With regard to payment at a higher level, the coimpany can formulate its own scheme for payment of dearness allowancxe. It can be a fixed percentage of the basic pay, or on a sliding percentage, as per company's schem and policy.
Please remember, once the company is paying more than the minimum wages, it can formulate its own scheme for payment of dearness allowance. Needless to say that all other factors like, region cum industry, capacity to pay etc are taken in to consideration by the company .
There is a differeence of goverment and public sector undertaking paying DA and private or limited company paying Da.
DA(DEARNESS ALLOWANCE ) is the aloowance paid to employees due to rise in Market price .
Generally DA is calculated as rise in consumer price index .And DA is connected with basic generally it is the %of basic pay.
SUPPOSE WE TAKE A BASE CPI AS 2460
CURRENT CPI IS 3460THEN RISE =1000
THEN RISE 1000/2460*100 = 40.65%
Then DA will be 40.65% of Basic.
We have workers on rolls working for more than 12 years in our machine shop. They are presently demanding DA to be given. At present we are paying Basic HRA CCA Conv.Allowance etc., which does not show DA as specific component. Can anybody guide me immediately should I agree to the team that DA will be included in their salary component and if YES what are the consequences on the CTC and if do not want to give DA what reply to be given.
Your immediate query will help to sort out the matter immediately.
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