Salary Breakdown Confusion: Can Anyone Share a Clear Example?

Wishing you all a happy and advanced Diwali. I have a question regarding salary breakdowns. I have come across many discussions on CiteHR, but I am unable to find a clear breakdown. Please assist me in resolving this.

Thank you,

T. Thilip Chand

Yes, I need a full breakdown structure including basic salary and HR components with their percentages.

There is no fixed structure for salary in any organization. Basic, DA, and HRA are the commonly used components, and there are numerous allowances from which you can choose. For example, conveyance, travel, medical, education, festival, newspaper, furnishing, meal, fuel, house maintenance, and so on. Even the above-mentioned DA and HRA are not mandatory to show in the breakdown.

Considering the taxation aspect, to provide maximum benefits to employees, companies select the heads and their percentages wisely. For example, HRA and conveyance are exempted to a certain extent from the tax purview. Also, one has to take care of BASIC & DA since many calculations like PF deduction, bonus payment, etc., relate to these items.

The above-stated few lines are only primary thoughts. It requires an in-depth study to finalize an organization's salary structure.

Common Salary Structure in Organizations

The commonly used salary structure in most organizations generally consists of the Basic salary, which is equal to or approximately 50% of your CTC. After this, certain constant components are included, such as Education Allowance and Convenience Allowance, which are Rs. 200/- for each child and Rs. 800/- respectively. These amounts are tax rebates up to this limit.

Following this is the HRA, with different limits for metropolitan and non-metropolitan cities. After that, there are other allowances, which are used to make up the difference.

Along with this, there are some legal compliances such as PF, P. Tax, Gratuity, etc., which are also constant and are a part of your CTC.

I am really surprised that you are not satisfied with the amount of discussion that has occurred in our community regarding Salary Breakup. I would request you to go through the existing posts clearly and then come up with questions on the same.

However, just to make you comfortable, please find below the details of the salary breakup.

Components:
Basic, DA, HRA, CCA, Medical Allowance, Special Allowance, Night Shift Allowance, Food Allowance, Travel Allowance, Referral Bonus, Encashment Bonus
PF, ESI, TDS, Loan deduction, other deductions