Salary Breakup Rules: Where Can I Find Details on Basic and Conveyance Percentages?

Hi all,

This is Shravan. Can someone give me information on where I can find printed details regarding salary breakup rules? I am looking for information on what percentage of the salary can be fixed as basic and what could be the percentage for conveyance.

Regards,
Shravan

Hi there,

Please find the attached document which may be useful for you. 😊

Thanks and regards,
Payal

Hello Payal,

You can even add other allowances to factor in additional payment. There are quite a few other terminologies that can be used, like DVI and special pay for salaries higher than allowable brackets for specialized positions. Companies can also include Gratuity and mediclaim details if they want to. The format you have provided is the standard one.

Regards, Praveen

Dear All,

Conveyance and Medical reimbursement are given to the maximum limit allowed as per IT rules, which is Rs. 9600 per year towards conveyance and Rs. 15000 towards medical reimbursement. These amounts are the maximum allowed in order to receive tax rebate; however, for both, you need to produce receipts and medical bills.

In some companies, HRA can go up to 40%, depending on the metro area you live in. Companies have their own salary structures. The similarity, however, can be observed in cases of contributions towards PF and professional tax. Additionally, in income tax rules, they have mentioned the maximum rebate one can get in a given salary head, like the two mentioned above. Therefore, companies generally aim to provide the maximum possible under these heads to help employees save on tax.

Regards,
Priya

Hi, Sravan.

The contents of the salary break up are as follows. You can prepare it according to your own suitability. HRA would be 50% or 60% of the basic salary.

- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowance
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax

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 who are not covered under ESI as the maximum ceiling for ESI is 10000/Month. Getting more than this will be covered under Mediclaim or it depends on the company policy.

Ex-Gratia/Bonus = A fixed amount as a bonus.

Annual Fixed Gross Cost = Gross/Annum + Ex-gratia

Annual Total Cost = AFGC + PF + ESIC

Annual total cost is also called CTC.

I hope this information has helped you to clarify your queries to some extent.

Regards,

Amit Seth.

I have read all the posts and have not received an explanation for:
Why have a salary component called Basic? If it is a statutory requirement, how do you decide the basic for any role?

Any help is welcome.

Dear Srived,

For each industry, there is a minimum wage fixed by the Labour Department in different categories as per the nature of work, which includes Basic & Dearness Allowance. (Dearness allowance is on a half-yearly basis; the Labour Department used to issue the notification for revised DA in the first week of February & Aug every year). It is mandatory for every employer to act as per the minimum wages notifications applicable to his industry and accordingly pay at least the same wages to his employees. Based on that basic rate, the employer can calculate the minimum salary. As there is no such rule for the maximum salary, the employer can offer any salary to the employee as per the industry standards after considering the minimum wages factor.

Regards,
Chetan

Dear friends,

Could anyone please clarify if there are any rules or guidelines regarding the fixing of the Basic wage? Most of the Deputy Chief Inspectors of factories are stating that the minimum wage set by the industrial labor department should be considered as the Basic wage. Is this correct, or can the factory determine the Basic wage separately as long as it covers the minimum wage requirement guided by the labor department?

For example, the minimum wage for Helpers in the tailoring industry in Tamil Nadu is Rs. 1825 + DA 741, totaling Rs. 2566.00. Should the factory set the Basic wage equivalent to Rs. 1825 + DA 741, or can they set it at Rs. 1200 + DA 741 + HRA 700, totaling Rs. 2641, which is higher than the total set by the Labor Department of Rs. 2566?

Please provide clarification based on any reliable rules or guidelines.

Regards,
Subiah. G