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On which amount we calculate the basic. Is it the CTC amount or the gross CTC amount ? Ranjeet Kumar
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Dear Ranjeet, The basic is normally calculated on to the gross salary. Do search this forum as the same topic has been discussed lot of times here.
Dear Prasanna kumar, Do use the search tab given in this forum as there are loads of information on to the requested topic.
Dear All,
The term Basic and CTC need not be inter related at all.
The Basic salary is fixed by the employer at his own free will. While fixing the basic one needs to ensure that the company follows the Minimum wages for the category of employment only. The Minimum wages act that is amended from time to time for various industries forms the guideline for fixing Basic and DA. If you pay above the act then there is no need to link it either with the Gross Wages or CTC.
However, some companies follow this pattern but it is not mandatory/ statutory.
Trust the matter is clear.
Dear Mr.Rajneeth Kumar,
There is no fixed (statutory) percentage for basic whether on CTC or Gross Salary. Basic is basically fixed keeping in mind The minimum wages act 1948 that is laid down by the respective state government and the employment category as mentioned above by Mr. M.V. Kannan.
Conventionally it is around 40% of the Gross salary arrived at, which is very convenient to process PF and other statutory obligations.
I agree with u sir. Fringe benefits are variables so that the basic should not be calculated on these.
Dear Ranjeet, 1. Basic is 40% of Gross salary in non metros And 2. Basic is 50% of Gross salary in metros but pls ensure it should not violate applicable minimum wage
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