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hi , i am new to the Payroll can any one help me to how to calculate the basic payroll and about the percentages for pf,hra,da.
In payroll system, salary has different components like basic+hra+ travel allowance+ other spcl. Allowance
basic:- 60% of gross ( for metro cities) whereas 40% for non metro cities.
Hra;-50% of basic
t.a=800 fixed
other spcl allowance:- it is adjusting figure of all .... I.e (gross- bais-hra-t.a= spcl. Allownace)
for pf deduction for employer 13.61% including administration charges ( 12% (pf)+1.61%(admin charges)
ceiling limit sis upto 15000 ---and absic should not less than minimum wages .
neetu bisht

Dear Neetu,
For the last financial year i had created 3 components for salary .i.e . Basic , DA, and vehicle allowance.Therefore the PF is deducted on Basic+ DA . But in future i want to change this criteria as this this leads to heavy PF deduction. Can we change the components for existing and new employees?

Dear Sunkara,
In payroll you can bifurcate your gross salary by using below percentage:
Basic - 60%
HRA - 30% (HRA generally half of basic)
Conveyance Allowance - 800/- Rs (because upto 800 its nontaxable)
Special Allowance - you have to adjust remaining
ex: GROSS 10000/-RS
Basic - 6000/-
HRA - 3000/-
Conv. Allw. - 800/-
Spl Allw. - 200/-

one workman working as a helper category under contract labour Act1970, and central rule 1971 under chhattisgarh minimum wages (central) it is possible to pay his basic salary Rs.15000 please confirm
Please let me know if we can change the DA amount session wise or it remains fixed .
Hi all,
Payroll is nothing but the salary calculation. The benefits of every allowances includes inside the payroll calculation. The percentage rate gets differed for certain allowances.
Listen to this audio-visual which is presented by the expert Mr. Ramesh Dayalan Associate Vice President — Implementation and Compliance Services @ ADP India
Designing a Simple Compensation Structure - On-Demand Webinars - ADP India
Hope you get a clear idea about how to calculate pf, hra, da from basic pay..!!
If you need further clarification about any other topic or updates, contact me through mail:
Stella :)

In addition to what other respected member's have suggested,
Basic : 60:40 % of gross (metro:non metro)
HRA: 20 to 40% of Basic
Transport: 800
Education: 200 (100 for each child, max. for two child)
Medical: 1250 ( provided supported document for tax exemption, max. limit 15000)
Uniform: XXX (for the professionals who used to go out for business mettings)
special: XXX
Gross is 20000 per month. Location is non mentro.
Basic: 8000
HRA: 3200
Transport: 800
Medical: 1250
Uniform: 2250
Special : 4500
Hope this would help.

Hi sankara

most of the members have given answered to your query hope you will be benefited from it just some add on from my side on my understanding.

conventionally you will find basic ranging from 30% to 60% in most of the private concern BUT your decision should be guided by the implication of that % and your company policies.


*Higher the basic higher will be the cost of company in the form of contribution to statutory compliance -- Thus referring/understanding your company (welfare driven/ cost driven) you should intelligently chose a right %.

*secondly though the contribution to EPF/ESIC are for the betterment of employees but the benefits ascertained are normally long term in nature (after retirement/willful withdrawal after a time period) and the choice of the amount of basic will thus lead to higher/lower contribution from the pocket of workers---Taking a condition of a high paid employee the contribution which he has to make to the statutory compliance (due to amount of basic) may not affect his cash in hand at the end of the month a much but can adversely affect the pocket of low paid employee, say 10,000 such kind of employee might be more concerned about what he is going to have at the end of the month to meet his expenses rather then future benefits.(worker satisfaction is an important concern)

One more thing you can consider is the type of industry in which you are and prevailing labor turn over.

If you are in a BPO where labor turn over are normally high you can chose to have a lower basic which will make your employee and employer both happy and may even address iteration, while if you are in some conventional industry where people like to stick for long term you can chose to have a higher basic slab.



Hi Sunkara,
There are many good resources available for calculating basic payroll and they are absolutely FREE!! You should try once.
Refer: Payroll Management Software, Paywhiz By Sinewave

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