Percentage Of Basic In A Gross Salary - DOC Download - CiteHR
Abhijit_Barua
Asst. Manager Compliance
Priya.1994
Payroll Executive
Vishwanathsavula
Human Resources
V. Balaji
Ir & Hr
Bhavinpjani
Accounts And Finance Executive
+12 Others

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Hello all,
is there any provision that the basic/basic+da should be 50% of the gross salary? What should be the percentage of basic in a gross salary & in which act it is mentioned?
Kindly clarify.
Parag

hello prag, basic percentage is 40 to 60% of the ctc or gross salary. BASIC- 60% HRA- 30% CONV- 10% GROSS SALARY - 100% IT’S ENOUGH FOR YOUR QUERY.
Dear Mukesh,
Thanx for ur reply. But do u have any circular by Govt. or something? I mean whatever u stated that u/ur company is following.
I wanted to know where is it mentioned in the statute?
Parag

there is no rule or clause in any Act, that basic must be 50% or 60% of the gross salary. This is being demanded by PF authorities of late and there is also circulr by PF authorities to their Officers, which is being circulated to various companies also.

I happened to attend a workshop convened by EFSI where one of the speakers was PF commissioner himself. when the same questions was raised by one of the participants, he clearly told that THERE IS NO RULE AS SUCH.

It is just becasue, if you have more basic fixed in the salary break up, the employee would get more benefits in terms of his pension, PF contribution (by the employer), etc. After all at the time of retirement, he needs money to run his family, is it not. Without this logic, there is no rule anywhere written in the Act, and that is what the PF commissioner conveyed in the workshop.

Now, many organizations are pressurized by PF authorities (by the internal circular they just floated), that the Basic (and DA) should not be less than the Minimum wages (prescribed by the Govt.). We need to deliberate on this.

Balaji

Dear Parag
It will help you
(1)Basic :35-40% of gross salary
HRA - 40% of Basic
Transport Allowance : Rs .800 (Fixed) -tax limits
Medical :Rs. 1250 (Fixed) - tax limits – (yearly 15000/-)
Adhoc allowance - Balancing amount
Total of (1) constitutes - Gross Fixed
(2) Gross benefits like - PF - 12% of Basic & DA
Gratuity :4.83% of basic & DA
ESIC-4.75% of GPA- (Less than 15000/- GPM)
Food Coupon
Mediclaim Insurance/Life
LTA
Bonus
Total of (2) constitutes - Gross Benefits
Sum total of (1) & (2) constitutes CTC
Regards,
Sanjeev Patil

Dear Prag
Income tax Act contains some provisions regarding HRA , please ask from any CA
I think in metropolitan cities it is 50% of Basic and non-metropolitan cities it is 40 % of Basic salary
RLDhingra
Advocate &
Labour Law Consultant
Email
09818309937

Before fixing basic just find the minimmum salary for that post as per the labour office govt notification,as per govt rule for each work there is a minimmum basic salary.we have to keep that basic and with that basic calculate the hra and other allowances... it will be good if we keep 60 % as basic.
regards
Ajesh.B
HR Admin Executive in a MNC

According to Minimum Wages Act, the Basic would be 35 to 50% of Gross salary. The range depends upon the C&B policies of the companies. Some companies believe in variable components and other believe in giving good basic within the range given above which means good post retirement benefits as well as fixed liability of the company.
Shneha D Thakur

Hi
Recently Karnataka High court gave judgement with regard to Splitting of Minimum wages for the purpose of PF contribution. The Honble Court held that Splitting of Minimum wages cannot be done and Pf contribution to be paid for the entire amount Ie ) for total wage.
I dont think there is any hard and fast rule followed to fix up the basic wages . Its all depends on management.

Basic Pay is the fixed monthly Salary Component received by employees.
It can be a fixed percentage of ctc based on employee grades like :
Grade 1: 15-25% of Fixed Pay
Grade 2: 20-30% of Fixed Pay
Grade 3: 25-35% of Fixed Pay
Grade 4: 30-40% of Fixed Pay etc.
But there is not hard and fast rule for it. It depends on company to company and their salary structure.
_______________________
PayrollSolutions
Software & IT Solutions Company


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