Just sharing my experience during my employment as HR in some companies. I used 3P method that is paying someone using 3 criteria :
- Performance (paying people by his/her performance, we get it from annual performance)
- People (paying people by his/her competencies - KSA (knowlede, skill and attitude)
- Position (paying people by his/her position, example : manager, supervisor, CEO, etc)
The Basic calculation that is normally followed is:
If the Salary is 2.4lakhs pa, Then monthly Salary will be Rs.20000, Then....
Basic Pay: 40% of Gross Pay
HRA: 50% of Basic Pay
Medical Allowance: Upto Rs.800-1000
Other Balance amount will be considered as Allowance in calculation.
For getting your Take home or Net pay deductions like PF and others has to removed from basic pay......
Companies that want to avoid long term liabilities normally give very less basic salary as it helps them save money. (Less P.F to be paid). The H.R.A again would depend from city to city and so would C.C.A. Each company has its own salary structure and it would be advisable for you check on a few salary break-ups and then may be get a combination of them whichever suits your company policy.
please find below example -
Salary Details –
Basic Salary : Rs. 3,000.00
House Rent Allowance : Rs. 1,200.00
Medical Allowance : Rs. 1,250.00
Conveyance : Rs. 800.00
Special Allowance : Rs. 3,750.00
Performance Incentive : Rs. 0.00
Gross Salary (A+B) : Rs 10,000.00
Basic Salary = Gross Salary * 30%
HRA = Basic Salary *40%
Medical Allowance = Fixed
Conveyance = Fixed
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