New to HR? How Do You Calculate Basic Salary from Gross? Seeking Guidance!

Hi Everyone, I am working as an HR Executive in a private company, and I am new to post-recruitment processes. As an HR professional, I would like to understand how to calculate the Basic from the Gross salary. Kindly assist me with this information, as I am eager to learn new things.

Regards,
Latha Jayachandran

As per any act, there is no rule to fix the basic wages from gross. We provide a bifurcation just to reduce the tax burdens from Income Tax and other administrative charges to the employer. Usually, the basic wage will be around 50% of the gross. Moreover, everyone should ensure that the basic wage is equal to or higher than the Minimum Wages Act.

I am sharing the salary split for your reference. Just explain to me the process of how the Gross & Basic pay are correlated.

Regards,
Latha J.

You make Basic as 50% of the gross pay. HRA is 50% of Basic. Conveyance is 800. Medical Allowance is 1250. Special allowance - rest.

So, normally Basic will be around 50-60% of the gross pay.