How Do You Calculate Basic Salary from Gross? Seeking Advice on Percentages

Hi, can anyone help me with how to calculate the basic salary from the gross salary? Is there a specific percentage that needs to be considered?

Please, can someone help me understand how to calculate my salary with all deductions and what percentage is deducted? Is the percentage based on the basic or gross salary? I am currently working with SSI. Please send me the information.

Please, can someone help me with how I can calculate my salary with all deductions and what percentage is deducted? Is the percentage calculated based on the basic or gross salary? I'm currently working with SSI.

Thank you for your assistance.

It is approximately 40% of the gross. The employees will benefit if the basic salary is higher because the contribution towards Provident Fund (PF) will also be higher.

Gross Salary - COLA *COLA is Cost of Living Allowance. Then, Gross Salary divided by 1.65.

Example:

10000 - 400 = 9600
9600 / 1.65 = 5818.18
5818 is the basic salary.

Regards,
Shahzaib Khan

Calculating Basic Salary from Gross Salary

For basic salary, we need to subtract all fixed allowances or COLA from the gross salary and then multiply the remaining figure by 1.55 or 1.65, depending on the percentage of house rent.

Example Calculation

- Gross Salary: 15,000/=
- COLA or Fixed Allowance: Rs. 450/=

15,000 - 450 = 14,550
14,550 / 1.55 or 1.65 = 9,387/8,818 is the basic salary

Regards,
Irfan Shabbir

Calculating Basic Salary from Gross Salary

There is no basic rule to calculate the basic salary. If you increase the basic salary, employees will receive less take-home pay, so try to adjust accordingly. Create an Excel sheet with a formula and then calculate using it; this will provide you with a clear picture. In my organization, it is set at 20% of your gross salary.

Regards,
Meena

Hi friends, good evening to all.

According to our company, the basic salary is 60% of the gross salary, HRA is 20%, and other allowances are 20%.

For example, if the gross salary is 7000/-, then the breakdown is as follows:
- Basic: 60% of gross = 4200
- HRA: 20% of gross = 1400
- Other Allowances: 20% of gross = 1400

If there are any mistakes here, please provide some details.

Thanks & Regards

Dear Sai,

I have attached a PDF document released by the EPFO Chennai (this is also available on the organization's website) that provides an interpretation of Basic Wages. The interpretation includes almost all allowances, excluding those mentioned therein. Please note that there have been no amendments to the definition in the act; rather, it is an interpretation. If you have any queries, please feel free to reach out.

M.V. Kannan

Hi all,

I have a query. Recently, I am verifying a payslip in which the gross salary is $50,000. However, the amount mentioned as Basic salary is $22,250. What is the percentage they calculated as basic?

Hi Sunkara,

It seems they have considered 45% of your gross earnings as your basic salary.