Salary Breakdown: How Do You Determine the Right Percentages for Each Component?

Hi Friends,

Currently, my company follows the following salary structure:

- Basic
- DA
- HRA
- Conveyance
- Other Allowance

Kindly provide me with the guidelines for percentage fixing for the above breakup. What are the rules governing percentage fixing?

Thanks,
Vinoth

Dear Vinoth,

The DA is as per the government notification. The Basic, as a rule of thumb, is between 30% to 50% of Gross. The HRA is 50% of Basic or 40% of Basic. The Conveyance is at Rs. 800/- per month (for ease of tax calculation); the Other Allowance is the balancing figure.

Regards,
Ashutosh Thakre

Conveyance can be up to 1600, 200 education allowance, and 1250/- medical reimbursement, and the remaining amount can be named as Special allowance.

Thank you.

Hi, you can keep salary breakups as below. There are no statutory provisions to keep the salary breakups. However, you should maintain basic & da as per minimum wage slabs.

- Basic: 60% of gross
- HRA: 20% of gross
- Conveyance: 10% of gross
- Other allowances: 10% of gross

Please ensure compliance with the minimum wage slabs while structuring the salary components.