There is another way to calculate the Basic salary too
As rightly said, there is n't any hard and fast rules for calculating the basic pay.
The current scenario is If the Basic pay is less than Rs 3500, the employer has to pay the minimum Statutory bonus ranging from 8.33%. Hence the employer makes the minimum basic of Rs 3600 and above. With effect from new parliamentry note of Basic revision to Rs 10000 towards Statutory bonus is still to be worked out.
However here are the few tips:
1. Basic Salary would depends on the designation level of the person.
2. Basic is usually fixed depending on the CTC (cost to the company). This can range from 20 to 60%.
3. Advisable to have optimum level to basic salary and get this standardized across the grades / levels for operational convinience & PF remittence which will affect employee's take home
4. Once the basic pay is fixed we can fix the other components with the required percentages (HRA, Other allowance, Medical, LTA, Reimbursemnts, etc
23rd October 2007 From India, Trivandrum