Understanding Salary Breakdown: Is Our Employee's Gross Salary Calculation Correct?

Dear Seniors,

Can anyone tell me the standard procedure for calculating the salary from the gross salary? Will the basic salary be 40% or 50%? One of our employees' gross salary is 10,000. Are they eligible for the ESI Act?

Salary Breakdown

Gross: 10,000
Basic 60%: 6,000
HRA 24%: 2,400
Conveyance: 800
Other allowance: 800
ESI: 175
PF: 720
Take Home: 9,105

Is this calculation correct?

Thank you.

There is no standard procedure for salary break-ups. All we have to keep in mind while preparing breakups is to reduce tax on employees. For a gross pay of Rs. 10,000, you should design the format in any way you see fit. Even what you have prepared is good enough. Make sure that basic pay and dearness allowance (DA) are not less than the minimum wages as per the act.

Salary Calculation Format

I have attached here the format which we are using to calculate salary. There is no standard procedure for calculating the salary. The basic percentage is different from company to company.

As per the ESIC Act, employees who are earning more than ₹15,000 as gross salary are not entitled to ESI. If the gross salary is below ₹15,000, they are eligible to receive ESI.

Regards,
Valan