How Do I Calculate Gross Salary from a Net Payable of Rs. 10,000?

Dear all,

Please tell me, if my net payable salary is Rs. 10,000, then how can I calculate to make it gross salary? What is the calculation and what deductions will be needed to make the salary net payable?

Regards,
Manmohan Bhatt

Gross salary means earnings: basic + HRA + CA + CCA + DA + other allowances. Deductions mean: PF (12% of your basic salary) + ESI (1.75% of gross salary) + PT. Gross salary minus deductions equals net salary. However, I don't know about your gross structure. Normally, the basic salary is 40% of the gross salary, which is mandatory. In some cases, it differs depending on the employer.

If you intend to give Rs. 10,000 as gross, reduce the city living allowance by Rs. 2,000. Thus, 10,000 - 2,000 = 8,000. Give 40% of 8,000 as the basic, which is 3,200. The transport allowance is fixed at Rs. 800. Now, you have the basic (3,200) + transport allowance (800) = 4,000. Subtract this from Rs. 8,000, i.e., 8,000 - 4,000 = 4,000, and give this as a special allowance. So, the salary breakup will be:

Basic: 3,200
Transport allowance: 800
Special allowance: 4,000
Total: 8,000
City Living allowance: 2,000
Total, as you intended to pay: 10,000

I hope this will meet your requirements.

Understanding Gross Salary

First, you need to understand what "Gross salary" means to you and your organization. Gross salary includes all costs capable of being expressed in terms of money. It encompasses the cost of benefits you provide to employees. You need to check the compensation structure of your organization and add the cost of all components to arrive at the Gross salary.

Computing Net Pay

Computing net pay is tricky, especially if you have a flexible compensation structure with a basket to choose from for allowances/reimbursements. Net pay will depend on the options the employee chooses. Therefore, it is crucial to understand the concept and create your own framework rather than relying on a formula that works in another organization.

If you need specific help, feel free to contact me at [Email Removed For Privacy Reasons]. I will be glad to assist you in understanding the concept and calculating Gross salary or vice versa.