Hi can any boday update me regarding, Special allowance. I mean to say what are the criteria for counting Special allowances. and how one can prepare salary splip for employee .. Regards, Vijay

23rd August 2007 From India, Mumbai

Arun Kumar Maitra
Presently Working As Company Secy. In Old
Human Resource And Industrial Relations
Hr Executive
+3 Others

Dear Vinay,

Special Allowance is any Allowance which is given under the following circumstances:

1) To Regularise Salary Structure:

For example: Suppose while recruiting a person for a particular position (say Dy. Manager) the annual CTC agreed upon is 12.00 lacs. Now, giving all allowances, perquisites along with the Salary for Dy. Managers in you Company comes to 11.00 lacs. Now this extra 1.00 lac can be given by way of Special Allowance.

2) To save post retiral benefits:

For example : If the Basic Pay of Employees are increased it has cumulative effect on PF, Gratuity and Leave Pay, so most companies when giving high rise in Salary usually give the rise in Special Allowance to save themselve from paying high retiral benefits and higher contribution to PF, Gratuity and Leave Pay.

Always remember it is easier to change Special Allowance as it can be treated and adjusted on case to case basis, while the same cannot be done for other allowances and perquisities like HRA, Conveyance which are general set on grade/designation wise. So, Special Alllowance is an allowance where if you cannot put a payment under any other hrasd you put it under Special Pay.

3) Others:Special Allowance relating to any court order, legislature or nature of Duty.

Revert back for further queries,


24th August 2007 From India, Thane
Hi SC,
Thanks for your valuable comments.
secondly I wants to know what are the criteria to decide HRA,
According to my knowledge it will be 5% of Total basic or Rs.40 whichever his higher but still I have some doubt.
Please send you comments on this above topic.
25th August 2007 From India, Mumbai
Dear Vijay,
Sorry for the delay..
You have said:
This percentage and amount is given in state House Rent Allowance Acts, like the 5% of Basic Salary is mentioned in West Bengal House Rent Allowance Act, so for employees covered under this Act, in States where there is such a statute; you must give the stated minimum amount as per the same.
For HRA since there is a Income Tax Benefit by way of rent paid, it is always better to give a substaintial amount under HRA to avail the Tax Benefits.
29th August 2007 From India, Thane
Following is the salary sheet format you just put up salary in the salary sheet then automatically it will give the break ups.I have also attached salary slip format for your reference.
<link outdated-removed>
sal slip Format .doc

4th August 2008 From India, Mumbai
Hi, SC,I am Rajan here,as you said Spl.Allowance we can change as per requirement,aslo you said to avoid high portion of contribution to pf,and bonus ,gratuity we can keep spl.allowance as per our requirement,but cannot its attract contr.towards pf,and with basic cannot we consider spl.allw.for bonus grat.calculation.perhaps in so many company spl.allowance fixed with govt.notification,for half yearly or monthly in that case we cannot change it.and i am not agree with point no.1 that 1 lakh we can put in spl.allowance.please advise.Rajan
7th August 2008 From India, Pune
Hi Swastik... thanx so much for sharing the information... that was really helpful.... :)
7th August 2008 From India, New Delhi
Dear all, Can anybody help me to caluclate Special Allowance, and Conveyance Allowance. Please let me know the percentage (%) to caluclate these allowance. With Love Ashok
22nd September 2009 From India, Bangalore
Hi. I m sending u al a copy of Salary Slip Structure
4th November 2009

Attached Files
File Type: xls salary_break_up_calculator.xls (17.5 KB, 3324 views)
Can any you please tell me in detail about the Special allowance( on minimum wages declared by govt) , which is also called goverment special allowance or govt. VDA. The reason for this question is , our management want to abolish the practice of giving VDA based on CPI index, and to start the Govt. special allowance declared from time to time in place of VDA. Please tell in detail.
2nd August 2012 From India, New Delhi

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