How is basic salary defined and what proportion of the cost to company (CTC) should be allocated to basic salary? For example, if the monthly salary is $20,000, is there a specified percentage that should be designated as basic salary? Can someone please provide an explanation?
From India, Delhi
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From India, Delhi
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Hi Vijaylakshmi,
For metro cities, the basic salary calculation is 50%, and for non-metro cities, it is 40%. For example, if your gross salary is 20,000, the basic calculation would be as follows:
- Metro Cities: 20,000 / 50% = 10,000
- Non-Metro Cities: 20,000 / 40% = 8,000
There are some companies that pay a minimum or fixed basic salary (4,000 or above 4,000) for employees who would earn more to reduce their PF contribution towards the employee's PF account.
Hope this information is helpful to you.
Regards,
Saritha
From India, Bangalore
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1For metro cities, the basic salary calculation is 50%, and for non-metro cities, it is 40%. For example, if your gross salary is 20,000, the basic calculation would be as follows:
- Metro Cities: 20,000 / 50% = 10,000
- Non-Metro Cities: 20,000 / 40% = 8,000
There are some companies that pay a minimum or fixed basic salary (4,000 or above 4,000) for employees who would earn more to reduce their PF contribution towards the employee's PF account.
Hope this information is helpful to you.
Regards,
Saritha
From India, Bangalore
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PF authorities are insisting on a minimum of 50% as basic (if DA is also included, then it should be Basic + DA) salary. If you structure it as annuities like Medical reimbursement / LTA, the basic will decrease.
Thanks and regards,
Kamesh
From India, Hyderabad
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Thanks and regards,
Kamesh
From India, Hyderabad
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Maintaining 40% or 60% of CTC in Basic Pay is not applicable for all companies. It varies from company to company. In general, there are no thumb rules to maintain Basic Pay.
In a private company, the company management decides how much % of CTC will be given as Basic Pay. In a government company, the Government of India (GOI) or its appointed body decides how Basic Pay and other benefits will be given to employees.
Conclusion: There are no thumb rules for maintaining a minimum % of CTC as Basic Pay.
From India, Bangalore
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In a private company, the company management decides how much % of CTC will be given as Basic Pay. In a government company, the Government of India (GOI) or its appointed body decides how Basic Pay and other benefits will be given to employees.
Conclusion: There are no thumb rules for maintaining a minimum % of CTC as Basic Pay.
From India, Bangalore
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Dear All,
Maintaining 40% or 60% of CTC in Basic Pay is not applicable for all companies. It varies from company to company. In general, there are no thumb rules to maintain Basic Pay.
In a private company, the company management decides how much % of CTC will be given as Basic Pay. In a government company, the GOI or its appointed body decides how Basic and other benefits will be given to employees.
Conclusion: There are no thumb rules for maintaining a minimum % of CTC as Basic Pay.
Regards,
Abhishek
From India, Bangalore
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Maintaining 40% or 60% of CTC in Basic Pay is not applicable for all companies. It varies from company to company. In general, there are no thumb rules to maintain Basic Pay.
In a private company, the company management decides how much % of CTC will be given as Basic Pay. In a government company, the GOI or its appointed body decides how Basic and other benefits will be given to employees.
Conclusion: There are no thumb rules for maintaining a minimum % of CTC as Basic Pay.
Regards,
Abhishek
From India, Bangalore
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Dear All,
Maintaining 40% or 60% of CTC in Basic Pay is not applicable for all companies. It varies from company to company. In general, there are no thumb rules to maintain Basic Pay.
In a private company, the company management decides how much % of CTC will be given as Basic Pay. In a Government company, GOI or its appointed body decides how Basic and other benefits will be given to employees.
Conclusion: No Thumb Rules for maintaining a minimum % of CTC as Basic Pay.
Regards, Abhishek
From India, Bangalore
Acknowledge(0)Amend(0)
Maintaining 40% or 60% of CTC in Basic Pay is not applicable for all companies. It varies from company to company. In general, there are no thumb rules to maintain Basic Pay.
In a private company, the company management decides how much % of CTC will be given as Basic Pay. In a Government company, GOI or its appointed body decides how Basic and other benefits will be given to employees.
Conclusion: No Thumb Rules for maintaining a minimum % of CTC as Basic Pay.
Regards, Abhishek
From India, Bangalore
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As per my knowledge, Basic and DA should not be less than minimum wages as defined by Minimum Wages Act. This is perhaps to ensure more PF contribution from employer and employee...
From India, Mumbai
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From India, Mumbai
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can somebody tell me what is the basic for employees who are working in small sized BPO in city like Bangalore....
From India, Bangalore
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From India, Bangalore
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Dear all,
Is there any specific ruling for maintaining a specific percentage as basic, DA, HRA, etc.? To the best of my knowledge, the competent authorities have the power to check whether the minimum wages, in total as per the act, are being paid or not.
Regards,
A Elangovan
From India, Madras
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Is there any specific ruling for maintaining a specific percentage as basic, DA, HRA, etc.? To the best of my knowledge, the competent authorities have the power to check whether the minimum wages, in total as per the act, are being paid or not.
Regards,
A Elangovan
From India, Madras
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For calculating retirals such as Provident Fund, Gratuity, and Pension, the basic salary is important. For employees earning dearness allowance, which is also considered for retirals, the basic salary is relatively low since dearness allowance is a substantial amount. Employers prefer to keep this portion of the remuneration lower because they have to contribute to the retiral funds, and this contributes to employment cost escalation.
For employees - mainly managerial and supervisory staff - who do not receive dearness allowance, the rule of thumb for large, well-established companies is that the basic salary constitutes 30% of the CTC. This is because an increasing portion of annual remuneration is being allocated to variable pay.
A. K. Basu
From India, Delhi
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For employees - mainly managerial and supervisory staff - who do not receive dearness allowance, the rule of thumb for large, well-established companies is that the basic salary constitutes 30% of the CTC. This is because an increasing portion of annual remuneration is being allocated to variable pay.
A. K. Basu
From India, Delhi
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Dear Seniours, Thanks to all of you, really this site giving me a lot of knowledge about HR field. Thanks for your co-operations................... Thanks & Regards
From India, Ambala
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From India, Ambala
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Basic salary includes what???????? i mean what are the various things covered under the Basic salary?
From India, Delhi
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From India, Delhi
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Please go to this thread if it may be useful: https://www.citehr.com/281623-comple...ess-excel.html
From India, Hyderabad
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From India, Hyderabad
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Salary structure CTC 15000.xlsx