New HR in Telangana: Can We Set 40% of Gross Salary as Basic Salary? Seeking Advice on Payroll Structure

Hi All, I have recently joined as HR in a private company in Telangana, and I have a few doubts about the new payroll structure, which was published in April 2021.

Questions about Payroll Structure

1. Can we take 40% of the gross salary as the basic salary? (as per Telangana State rules)

2. Can we use "SPECIAL PAY" as a component in the salary structure for all employees? (as per Telangana State rules)

Please do help me out.

Regards, Niharika
HR
Location: Hyderabad, India
payroll structure, salary structure, private company, basic salary, Country-India, City-India-Hyderabad

Response to Query:

In response to your query regarding the payroll structure in the private company in Telangana, let's address the two specific questions you raised:

1. Can we take 40% of the gross salary as the basic salary? (as per Telangana State rules)

As per the Telangana State rules, there is no specific mandate that dictates the exact percentage of the gross salary that must be allocated as basic salary. However, it is essential to ensure that the basic salary complies with the minimum wage requirements set by the state government. It is recommended to refer to the Telangana Minimum Wages Act to determine the appropriate basic salary structure that adheres to legal regulations.

2. Can we use "SPECIAL PAY" as a component in the salary structure for all employees? (as per Telangana State rules)

The inclusion of a "SPECIAL PAY" component in the salary structure for employees should be approached cautiously. It is crucial to align this component with the guidelines provided by the Telangana State laws and ensure that it is clearly defined in the employment contracts or company policies. If "SPECIAL PAY" is intended to serve a specific purpose or fulfill certain criteria, it should be transparently communicated to employees to avoid any misunderstandings.

Key Points to Consider:
- Determine the basic salary structure based on the Telangana Minimum Wages Act.
- Clearly outline and communicate any additional components like "SPECIAL PAY" in the salary structure.
- Ensure compliance with all relevant labor laws and regulations to avoid any legal implications.

By following these steps and staying informed about the specific regulations in Telangana, you can establish a payroll structure that is both compliant and beneficial for employees in your private company.