How Do I Calculate Basic & HRA for a Rs. 14,000 Take-Home Salary with Allowances?

Hi, I need information on the salary breakup for a monthly take-home of Rs. 14,000 after PF & ESI deductions. This includes the travel allowance of Rs. 3,200 for a disabled employee, Rs. 500 towards uniform allowance, and a medical allowance of Rs. 1,250. These are fixed amounts.

I need information on how to calculate the Basic & HRA.

Thank you,

Regards, Rosheena

The HRA is given either as a fixed amount, which varies from organization to organization, or it is given as a percentage of the Basic Pay. The Government of India has classified the cities for HRA purposes, and you can follow that. Normally, the components of salary are fixed first, and the summed-up amount is the total salary. It looks like you are doing it in reverse.

For a take-home salary of Rs. 14,000, what bifurcation should you make? It should be equal to the statutory minimum wages fixed by the state. Then use the same basic pay and dearness allowance and make the entire amount qualify for EPF and ESI contributions.

Salary Breakdown
BASIC + DA = 6000
HRA = 3000
TA = 3200
MED = 1250
UNI = 500

TAKEHOME = 13950

In my opinion, if the take-home salary is less, i.e., the monthly gross is lower, the Basic should be 60% of the monthly gross. When the definition of wages is implemented, the problem will be reduced after restructuring the remuneration structure.

It may be set as Basic - 9513, HRA - 1392, Other fixed allowances - 4950, Monthly gross - 15855, PF deduction on (9513 + 4950) = 1736, and ESI deduction = 119, Take-home = 14,000/-. This fitting can also be done using an algebraic equation.

The above has been determined by a trial-and-error method considering Basic as 60% of the monthly gross, and HRA has no % formula. In this case, HRA is close to 15% of Basic.

Regards, S K Bandyopadhyay