Understanding Basic Salary and Allowances
Basic salary means the total emolument agreed to be paid for the services of an employee. Anything over and above this, which is paid to compensate for certain costs on account of the employee's stay in the locality for the purpose of employment, are allowances. House rent allowance and traveling allowance are compensatory allowances. There are certain amounts that will accrue under specific conditions, such as incentives and overtime allowance, which are also outside the scope of basic wages. In short, there is no specific percentage for basic wages based on the gross salary.