Can My Company Lower My Basic Salary After a Promotion? Seeking Advice on Impact

Dear Sir, My basic salary was $15,943 monthly until March 2022. However, after the appraisal in April 2022, my basic salary was reduced to $11,451. Can the company reduce the basic salary once it has been set at a certain level? The company HR stated that my grade had changed from Senior Executive to Assistant Manager in April 2022, leading to the reduction in basic salary. This reduction significantly impacts my gratuity and other benefits. The difference amount has been added to other components. My previous CTC was $327,000, and the new one is $401,254.

Thank you.

Hi, your employer is not supposed to do that. It is wrong to reduce the basic salary and to add the difference in other components.

Hello Sanjay Soni, As per the new HR rule, your basic salary will be deducted by 50%, previously it was 40%. Therefore, your basic salary will appear higher, but your take-home pay will be significantly lower due to the new rules and packages.

Dear Sanjay, This is not fair to reduce the basic salary. I hope you are aware that the Central government is going to implement a rule stating that the basic salary should be 50% of the Cost to Company (CTC). Why is your employer doing this to the detriment of employees' savings? It will also have an impact on your annual components.