Salary Structure - Special Allowance

Ananya12
I have to give a 20% hike to an employee. Is it possible to give that person a 20% on each component rather than on the Total Salary? Of course Medical will be 1250 p.m. and LTA will be 800 p.m., LTA would be 2 months of basic (annually) and PF would be 12% of Basic. But how do I give the Special Allowance?Do I do a flat 20% on the special allowance too? While I understand Special Allowance is the balancing amount,is there a specific rule for Special Allowance in terms of percentage? Or is there a law that the hike has to be given to the Total Salary rather than each cmponent?
jeevarathnam
HI
You shall hike flat 20% on all the components. But as you said Medical & Conveyance shall not exceed 1250 & 800 respectively. Regarding special allowance there is no any rule as any % for special allowance. More over Special allowance is the difference between Gross pay and other component of wages. If you make 20% on special allowance then there won't 20% hike on gross.
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