NIVI2015
2

Greetings! Hello everyone!

Could anyone please let me know what should be the wage structure of a company? Like what should be the basic pay of an employee and which amount of HRA should be calculated on Gross Salary or on Basic salary.

Please let me know in brief how should a company pay the salary of its employees.

From India, New Delhi
PROFESSIONALS AND BUSINESSES PARTICIPATING IN DISCUSSION
Nanu1953
Ceo-usd Hr Solutions
HROne
Content Marketing Strategist
KK!HR
Management Consultancy
NIVI2015
Hr/admin
+1 Other

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hr.jagdish@shinsungcnt.com
hi !

I am working in Greater Noida in Manufacturing Company.

First you prepare grading or level of employee .
Generally in every company there are two types of employees- 1 getting minimum wages . 2. more than Minimum wages or supervisory or managerial
For minimum wages earning employees ,you need to fix basic not less then minimum wages.

for supervisory and managerial level- you should make slab according to grading(there is no any such specific rule but as per new wage code rule and supreme court judgement in EPF related one case it is assume that basic should be at least 50% of CTC.

Better practice is that you make first grading and as per grading you can make basic, HRA(40-50% in non metro,50-60% metro cities),Gross and CTC.



Regards,

Jagdish Kandpal

From India, Greater Noida
asha-girish
Hello, HRA should be calculation on Basic salary not on gross. Thank you, Asha S K

Anonymous
WHAT IS THE BASIS FOR SAYING THAT IN CASE ONE IS DRAWING MINIMUM WAGES THEN BASIC HAS TO BE EQUAL TO MINIMUM WAGES?
From India, Noida
KK!HR
1317

HRA is drawn as a % of of the basic pay. Govt. of India has fixed HRA for all the places, it can be used as a guideline.
From India, Mumbai
KK!HR
1317

The minimum wages notified by the Govt. has two components, the Basic Pay & DA. The notified minimum wages amount has to be paid as per the skill level of the employee. An employer can vary the Basic pay & DA amount so long as the total notified amount is paid
From India, Mumbai
nanu1953
257

There is no law to say that HRA should be paid on Basic or Monthly gross & what should be the %. As per ITAX , there is rebate for HRA and the calculation is linked to % of Basic & DA. As per the definition of wages under Minimum Wages Act it is Basic, DA and HRA.

But all States and Central Govt. published Minimum Wages only Basic & DA. Moreover, there are States where is State House Rent Allowance Act ( WB, Maharashtra etc.) minimum HRA to be paid 5% of Basic & DA.

Considering all above and prevailing practice, majority organizations are following HRA as % of Basic. I have come across with organization where HRA is % of CTC.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

From India, New Delhi
HROne
13

Hello NIVI2015,

First things first, HRA or House Rent Allowance is typically determined by an employee’s salary.

According to the income tax regulations, the tax-exempt part of the House Rent Allowance) is the a minimum of these amounts: Actual HRA component of salary, 50 percent of basic salary if she or he resides in Delhi, Chennai, Kolkata, or Mumbai; 40 percent if he or she resides in any other state.

If you are preparing a salary structure, you should surely check this blog. It will help you get a clear understanding of salary structure and all terminologies related to it.

Hope this answer helps you!

From India, Noida
mechmen-hr
Basic pay is applicable on gross pay and HRA depends on basic pay.
From India, Bhopal

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