Understanding Salary Components
It seems you need to understand the basics first, such as what is salary, what is gross salary, and what is net salary. Salary is an earning that consists of basic pay and various allowances depending on the terms of the contract and status governing the employment.
Gross Salary
Gross salary means the total of all earnings.
Net Salary
The term net salary is the salary in your hand after various deductions from the gross towards statutory/non-statutory components. The salary is calculated based on your working days or your absent days. If you work for fewer days, your earnings, i.e., gross, are less and obviously your net.
Overtime Payment
Overtime is a payment for your extra work beyond the normal working hours. Now, please tell me, if I pay you overtime based on your net salary, is it acceptable to you?
Thank you.