New to HR Generalist Role: How Do You Calculate Salary Components Like Basic, PF, and HRA?

Hi, as I am new to the HR Generalist role, I would like to know the salary breakdown or salary calculation of an employee in the organization. What is the standard percentage to calculate the basic, PF, HRA, LOP, etc., mentioned in the payslips? I would be thankful to receive the proper information regarding the above-mentioned query.

We are a manufacturing company in Tamil Nadu employing about 40 people in total, out of which 20 are workmen. Below, I am outlining how we have broken down the salary for workmen. I am not sure if this is entirely accurate. I hope this breakdown helps, and I believe that experts on this site can provide better advice.

Example Salary Breakdown

For example:
- GROSS = 10500
- Basic = 50% * 10500 = 5250
- DA = 20% * 10500 = 2100
- HRA = 10500 - 5250 - 2100 = 3150
- LOP for 1 day absent = 10500 / 26 = 403.84

Thank you.

Hi, nowadays in Tamil Nadu, the PF enforcing officer is mandating every company to split the wages in the following manner. Our company has also started following this method. Anything less than 60% of the basic from gross will land you in trouble.

- Basic: 60%
- HRA: 20%
- Other Allowances: 20%
- Total Gross: 100%

Regards,
Madhan

You have 29% as other allowances. Do you deduct PF on that as well? We deduct PF on basic and DA. Which part of Tamil Nadu are you in?

Thanks.

Breakup varies from organization to organization. Generally, Basic is 30%-40% of CTC; HRA is 40%-60% of Basic; PF is 12% of the Basic monthly salary. LOP depends on the policy that you have.

Thank you.

It all depends on what salary and other perks are applicable. Generally, there are only two fractions: basic at 60% of total emoluments and the balance at 40% if there are no D.A. (Dearness Allowance) or V.D.A. (Variable Dearness Allowance). Out of the remaining 40%, divide it as 40% H.R.A. (House Rent Allowance). The rest is calculated for conveyance allowance, children's education allowance, newspaper & magazine allowance, etc. Tax liability will also be taken care of.

Thank you.

Regarding PF deductions, everyone should only deduct from Basic & DA, which is what we are currently doing. Do you have any other queries?

Regards,
Madhan

What is the percentage of PF for the employer and employee?

I am an HR professional and can help you with any questions you have regarding Provident Fund contributions for both employers and employees. Let me know if you need more information.

What is the percentage of PF for employer and employee?

I have corrected the spelling and grammar errors in your sentence. I have also added a line break between the corrected sentence and the separator for better presentation.

What is the employer and employee contribution of PF?

The employer and employee contributions to the Provident Fund (PF) vary depending on the country's regulations and company policies.

Employer contribution typically refers to the amount that the employer contributes to the PF on behalf of the employee, while the employee contribution is the portion deducted from the employee's salary to be deposited into the PF account.

It is essential for both employers and employees to understand their respective contribution obligations to ensure compliance with the PF scheme.