Understanding Salary Breakdown: How Are Wages Structured in Food Chains?

Dear Friends,

Please share your views on the salary slabs/grades that are typically followed in food chains. If an employee is given a minimum wage of Rs. 3400/- (for Delhi, unskilled), what could be the possible breakdown of the salary in the appointment letter?

A quick response will be appreciated.

Thanks & Regards,
Sashmita

Dear Sashmita,

I am Amit Seth, originally from Lucknow but currently in Ahmedabad. I completed my project training at Pizza Hut, Delhi. Please find below the details of the same:

- Basic: 800
- HRA: 480
- TA: 800
- Other allowances: 1320
- Gross PM: 3400

Could you please confirm if it is applicable or not?

Regards,
Amit Seth

Dear Amit,

As per the law, the minimum wage is equal to basic and special allowances. How can that be legally correct? If your findings are true, is that justifiable? Your comments please.

Sashmita

Hi Sasmitha,

You can split the salary as follows:
Basic - 2700
HRA (25% of basic) - 675
Other allowances - 25

The basic salary must not be less than 2700. You can set the basic above this amount.

Regards,
Joylyn

If you could let me know the SALARY components in your structure, I would send you the one by designing it.

Regards, Kiran.

Dear Joylyn & Kiran,

Thank you very much. I was under the impression that the basic wage is always equal to the minimum wage and it cannot be less than that. However, in certain organizations, I have seen the basic wage as low as Rs. 1700/-. Could you please confirm under which law and section the basic wage cannot be less than 2700/-?

Kindly suggest the structure for a gross income of Rs. 3400/- as follows:
Basic:
HRA:
CA:
City Compensatory Allowance:
Special Allowance:
Shift Allowance:
Incentive (if any)

Thanks & Regards,
Sashmita

Dear Sashmita,

As per section 2(h) of the Act - "Wages" means all remuneration, capable of being expressed in terms of money, which would, if the terms of the contract of employment express or implied, were fulfilled, be payable to a person employed in respect of his employment or of work done in such employment [and includes house rent allowance], but does not include:
1. the value of:
a. any house accommodation, supply of light, water, medical attendance, or
Yes, one mistake is there - TA doesn't come under wages. That amount you can include in other allowance. But thanks, dear, due to your question, I just refreshed my memories.

Regards,
Amit Seth.

Hi Sasmitha,

You need to check the Minimum Wages Act for details related to various industries. You can consult with your company's auditor or legal advisor.

Regards,
Joylyn

The basis here means the total in-hand salary but not the actual BASIC salary component. Anyhow, I am 90% sure of it, but not 100%. So, please check it. The salary structure would be:

CTC 3400

BASIC 1000 HRA 400 CONV. 450 HMA 470 Special All. 461 Shift Allo. 350 PROF. 0 ENT. 0 LTA 0

GROSS 3131

PF 120 ESI 149

CTC 3400

INHAND 2956

Regards, Kiran.

Dear All,

Basic wages cannot be less than the minimum wages specified for a particular category according to various state rules. PF and ESI deductions should be based on the minimum wages.

Best of Luck!

Dear All,

Basic wages + DA should not be less than the Minimum wages. For details, you can refer to the Minimum Wages Act.

Ranjeet

Hi Kiran,

Thank you for the efforts put in by you. As per the breakup provided by you, even then the in-hand salary is less than the minimum wage quoted for Delhi (unskilled) = Rs. 3312/- (Feb 07 not yet aware). So, my query remains the same. How can I obtain the salary breakdown for Rs. 3400/- that is legally correct?

Thanks & Regards,
Sashmita

Dear Amit,

Thank you for the clarification. This means the breakdown of Rs. 3400/- can be as follows:
- Basic: 1360
- HRA: 680
- Conv: 800
- Other Allow: 680

Please confirm if the total "wage" equals 3400/-.

Sashmita

Dear Sashmita,

Sorry for the late reply.

The sum total of these figures exceeds 3400/-. Therefore, you can also structure it as follows -

Basic: 1000
HRA: 500
Conv: 800
Other Allow: 1100

Paying more in Basic may result in higher PF deductions and lower take-home pay. However, since these employees are already receiving less, we should aim to ensure they receive a higher net salary.

Hope this arrangement works for you.

Regards,

Amit Seth.

Hi,

Can you help me with setting up a salary structure including Basic, HR, Conveyance, Medical reimbursement, and Special allowance components for a candidate with 3 years of experience in IT? It would be of great help if you could assist me, as I am new to this department. I would also like to know the actual salary range in Mysore for IT professionals.

Regards,
Sheelu