How Should I Divide Employee Salaries into Basic, HRA, and Other Components?

Hello there,

I have started my company and don't know exactly how to divide my salary into the different heads. I mean, what percent for Basic, what is it for HRA, and other stuff. I have a salary ranging from 15k to 50k per month for my employees.

Hi Sajid,

The contents of the salary break-up are as follows; you can prepare it at your convenience. HRA would be 50% or 60% of the basic salary.

- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per month
- Gross Per Month = Sum of all the above
- Gross Per Annum = 12* Gross/Month
- PF Contribution = 12% of Basic/Annum
- ESI Contribution = 4.75% of Gross/Annum
- Medical = The mediclaim facility provided to employees not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Amounts exceeding this will be covered under Mediclaim or as per company policy.
- Ex-Gratia/Bonus = A fixed amount as Bonus
- Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
- Annual Total Cost = AFGC + PF + ESIC
- Annual total cost is also referred to as CTC.

I hope this clarifies everything. Please feel free to ask if you have any queries.

Additionally, please find enclosed a sample format of a salary slip, as you mentioned the subject as salary slip.

Regards,
Amit Seth.