Fixed pays are
Basic, DA, HRA, Conveyance allowance, special allowance, adhoc allowance, medical reimbursement, LTA, etc. (some of these can be annual payments also)
Variables pays are
DA (if linked to CPI points), incentives, OT, shift allowances, travel allowances, etc.
There is no fixed rule that a particular component is a fixed pay. Generally Basic & DA are the fixed components and depending on company's policy, other components get added as fixed pays.
Trust this clarifies the matter.
Can somebody please explain what fixed pay and variable pay is. It would be great if examples are provided
I am Ramesh according to my knowledge about Fixed Salary once it fixed from employers some amount like 10,000 Rs/- you will get only that amount.
Comming to Variable salary there is no limit for your salary that is only depending on your performance means. you did better performance in your field you will get Incentives and commissions like that.
Your Salary 10,000
Total : 16,000
Bonus and increments are neither fixed pays nor variable pays
As Bonus is statutory and is payable only if your basic fall within Rs.10,000
Increments does not come either in fixed or variable pay as it is not paid and is subject to assessment. It gets distributed to basic and other components after it is paid. The question is it becomes variable or fixed pay only after it is paid and not before that.
The question is which is fixed salary
It is the Basic Salary which is fixed for a certain period of time may be for 3 years 5 years as per the company's status
basic salary is increased when the increament comes. but that is also for a span of time.increment will come once in a year or two dependinbg on the company's pay structure.
House Rent Allowance(HRA) is a part of Fixed salary
Now Variable Salary is Dearness Allowance(VDA) as per Consumer price index(CPI) published by the Govt authority in every month.
Allowances will not be considered in any part of fixed or varible pay. becz they will not take part in your PF/gratuity calculation
Thank u all
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