I have to give a 20% hike to an employee. Is it possible to give that person a 20% increase on each component rather than on the Total Salary? Of course, Medical will be 1250 p.m. and LTA will be 800 p.m. LTA would be 2 months of basic (annually), and PF would be 12% of Basic. But how do I give the Special Allowance? Do I apply a flat 20% on the Special Allowance too? While I understand Special Allowance is the balancing amount, is there a specific rule for Special Allowance in terms of percentage? Or is there a law that the hike has to be given to the Total Salary rather than each component?
From India, Bangalore
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From India, Bangalore
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You shall hike a flat 20% on all the components. However, as you said, Medical & Conveyance shall not exceed 1250 & 800, respectively.
Special Allowance Considerations
Regarding special allowance, there is no rule for any specific percentage for special allowance. Moreover, special allowance is the difference between Gross pay and other components of wages. If you apply a 20% hike on special allowance, there won't be a 20% hike on the gross pay.
From India, Bangalore
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653Special Allowance Considerations
Regarding special allowance, there is no rule for any specific percentage for special allowance. Moreover, special allowance is the difference between Gross pay and other components of wages. If you apply a 20% hike on special allowance, there won't be a 20% hike on the gross pay.
From India, Bangalore
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