Salary Breakdown Confusion: Should Basic Pay Be Calculated Before or After Variable Pay?

Hi Everyone,

I want to know that one of my employees has a salary package of 13 LPA (1 LPA variable pay), and I am working on breaking down his salary. So, do we calculate the basic pay (30%) on 13 LPA or on 12 LPA (after deducting the variable pay)?

It would be a great help if anyone could answer my question.

Dear Concern,

If you are stating that you are offering a fixed salary of Rs12 LPA plus Rs1 LPA as variable pay, the salary breakup should only be done for the fixed salary, which means that the Basic should be calculated on 12 LPA. I hope this clarifies your concerns.

Kindly let me know if any further information is required.

Regards,
Hareesh K - HR