What's the Minimum Basic Salary We Can Offer in Delhi Given the ₹8,600 Wage?

Respected Seniors, kindly let me know what should be the minimum basic salary we can offer to an employee as the minimum wage in Delhi is ₹8,600.

For example: ₹3,000, ₹3,500, ₹4,000.

Thank you.

The minimum wage rate fixed under the Minimum Wages Act has two components: Basic wage and special allowance/VDA. The Spl. Allowance/VDA is revised every six months by the State Government/Central Government. The Basic Wage is also revised with a gap of a few years. If you refer to the Minimum Wages Act of the Delhi Government, you will find the existing Basic Wage amount.

Regards

As mentioned in the post, the minimum wages in Delhi are ₹8600. My query is, what is the minimum basic salary that we can show on the salary slip?

Thank you.

You may pay any amount to your employees, but you cannot pay less than the minimum wages notified by the state government. Please act accordingly.

Thanks and regards,
S.K. Johri

Keep 50% of the gross salary in the basic. In this case, no inspection in the future will raise problems like PF inspection, etc.

In my opinion, if the minimum wage is ₹8,600, it means that you cannot set the basic salary plus VDA (Variable Dearness Allowance) to be less than the minimum wage. The minimum wage itself implies that it should not be less than this amount. If you are offering ₹8,600 only, then no other components can be added, such as HRA (House Rent Allowance), Conveyance, etc. You have to pay at least Basic + VDA (or only basic) = not less than ₹8,600 in your region. Please correct me, seniors, if I am wrong.

There are a few issues here. ₹8600 is for 26 days under the MW Act. Thus, arrive at the daily rate. That's the minimum wage rate per day.

Bifurcation of Monthly or Daily Rate

If you want to bifurcate the monthly or daily rate into basic plus components, find out the DA pattern that can be implemented in such a way that the basic plus DA amount under that particular pattern matches the total MW amount, as the DA pattern may have to be maintained regularly. Otherwise, simply follow the basic of MW and show the allowance separately as declared by the Government.

Hope, now you are clear.

If we bifurcate as given below:

Salary Breakdown

- Basic: 3500
- HRA: 1750
- Special Allowance: 3350

Is it correct?

Please note that wages equal basic + VDA, not the gross. This means if the minimum wage is ₹8600/-, then you must set basic + VDA to not be less than ₹8600/-. I hope this is clear!