What Exactly Is 'Basic Salary' in Financial Terms? Seeking Insights for HR Document

Hello Everyone!

I understand the question I am posting is very silly to answer. However, I would want the seniors to give the definition of the BASIC SALARY.

We are preparing a functional document for our HR product and hence require a definition for the salary component BASIC SALARY. Though we know what basic salary is, I want it in financial terms.

Regards,
Chandrika

The basic salary can be defined as under:

Basic Salary means the monthly fixed salary excluding allowances, perks, and benefits payable based on the market value of the job and the compensation philosophy of the organization.

Base salary is entirely based on the pricing of the job through job evaluation, which then translates into the total compensation package, including operational and fixed allowances:

Operational Allowances can include Shift Allowance, Hazardous Allowance, Specific Location Allowance, Working Conditions Allowance, and other hardship-related allowances that are operation-specific.

Fixed Allowances can include Housing Allowance, Transport Allowance, Education Allowance, etc.

Regards,

Rashid