Salary Breakdown: What's the Minimum Percentage for Basic Pay According to Rules?

While bifurcating gross salary, what will be the minimum percentage for fixing the basic salary? Please suggest with the relevant rule.

Bifurcation of Salary Based on PF Contribution

Bifurcating can depend on whether he/she wants to contribute to PF or not.

For example, if a person has been appointed for Rs. 20,000, then the breakdown without contributing to PF would be:
- Basic: 16,000
- HRA: 3,000
- Conveyance: 1,000

In the case of wanting to contribute to PF, the breakdown would be:
- Basic: 15,000
- HRA: 3,000
- Conveyance: 2,000

My question is regarding employers who pay higher wages to their employees but set a very nominal basic salary to reduce PF liability. Is there a minimum fixed percentage for determining the basic salary?

There is no hard and fast rule for the fixation of basic salary out of the gross salary. However, the general rule is that the basic salary should not be less than the minimum wage set by the respective state governments.

Regards, N. Lokanadha Babu
Manager-HR