Salary Increase Dilemma: Should I Offer a 30% Raise Plus Allowance or a 40% Raise?

Hi, Is it good to increase the salary by 30% and the rest as an allowance, or just increase the salary by 40%? The employee is requesting a 40% increment, and he is a good performer. Seniors have suggested increasing it by 30% and allocating the rest as an allowance. Please advise.

Hi, A 30% to 40% hike is good. In general, employees will expect an increased take-home pay after the hike. Therefore, based on your salary structure, do whatever is best for the employee.