Can Basic Salary Percentages Differ for Employees in the Same Company?

Hello everyone, this is Jyoti. I would like to know if it is possible for the percentage of basic salary for two employees to differ in the same company. For example, if Employee A receives 7000 rupees, then their basic salary percentage is 41%, and if Employee B receives 15000 per month, then their basic salary percentage is 30%. Is this possible? Please guide me.

Regards,
Jyoti

Yes, it is possible. There are no restrictions on the salary structure. However, if you set the basic salary at 41% for ₹7000, the basic wages will be lower than the Minimum Wages Act. Therefore, you would not be complying with the Minimum Wages Act.

Moreover, the PF department may inquire about the reason for setting 30% as the basic salary. Since the basic salary is less than ₹6500, you may not be able to provide a satisfactory answer to them. It is advisable to set at least 50% as the basic salary.

Salary Scales and Basic/HRA Variations

Salary scales can vary, resulting in different basic/HRA amounts based on different grade pays. For example:
• 5200-3%-25000
• 16500-6%-56000

However, the percentage of basic and HRA used for calculating CTC/salary remains the same for all grades, regardless of positions, i.e., 50% of gross/40% of gross, etc. This practice has been consistent in my experience working at a public limited company.

In contrast, in various private limited companies, I have observed cases where the calculation of basic/HRA differs, especially at workmen levels, as the employer may seek to avoid certain statutory obligations regarding contributions. This discrepancy occurs in such scenarios.