Salary Breakup Dilemma: Is Our Plan Compliant with Punjab Govt. Rules?

Hello Professionals,

Could you please help me set the salary breakup according to Punjab Govt. compliance? We want to set the new salary breakup as follows:

- Basic: 75% of Gross
- HRA: 25% of Gross
- Special Allowance: Remaining amount.

Please confirm if this is correct or advise on how we can set it now.

If the total of the basic wages and dearness allowances payable as per the minimum wages notified by the government is equal to 75% of your gross salary, then the bifurcation is okay and legally maintainable. Otherwise, you will have to consider the allowances like special allowances and HRA for contributions and payments like bonus, PF, gratuity, leave encashment, etc.

Of these, HRA may qualify for exclusion. However, if it is paid to all employees without considering their residential status, such as whether they reside in leased accommodation or if their spouses receive HRA, then its exclusion from gratuity calculation or PF contribution may face challenges.

Hi Lucky, To comply with Punjab government regulations, it's essential to ensure that the salary breakup meets the legal requirements and follows the specified guidelines.

Salary Breakup Details

For the salary breakup you provided:

Basic Salary: 75% of Gross
House Rent Allowance (HRA): 25% of Gross
Special Allowance: Remaining amount

This breakdown seems reasonable, but it's crucial to verify it against the latest regulations from the Punjab government to ensure compliance. Additionally, certain aspects such as provident fund contributions, professional tax deductions, and other statutory deductions may also need to be considered.

Thanks