Clarification on Basic Salary Percentage
Often, one question is asked: what is the percentage of the basic salary? Because there is no clarification, some say the basic salary should be 60% of the gross amount, with the remaining 40% able to be allocated to HRA, CCA, and other allowances. Others argue that there is no specific rule stating that the basic salary must be 60%; they suggest figures such as 40%, 45%, and 50%.
Therefore, please clarify this confusion. Is there any central or state government regulation or rule, as per an act, in the private sector that mandates the basic salary to be 60%? If there is any notification regarding this matter, please provide it.
Thank you.
From India, Delhi
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Often, one question is asked: what is the percentage of the basic salary? Because there is no clarification, some say the basic salary should be 60% of the gross amount, with the remaining 40% able to be allocated to HRA, CCA, and other allowances. Others argue that there is no specific rule stating that the basic salary must be 60%; they suggest figures such as 40%, 45%, and 50%.
Therefore, please clarify this confusion. Is there any central or state government regulation or rule, as per an act, in the private sector that mandates the basic salary to be 60%? If there is any notification regarding this matter, please provide it.
Thank you.
From India, Delhi
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I don't think there is any such government rule. As per my experience, most of the private companies (MNCs) keep the basic salary high as opposed to private companies (Indian). Indian companies mostly keep the basic at about 30-40% of the total CTC (Cost to Company). It depends on the company's individual policies.
From India, Delhi
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7From India, Delhi
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Understanding Minimum Wage Components
In minimum wage, there are not too many components. The total wage is basic pay. Hitherto, at least two components, i.e., basic pay and living allowance, were present. Now, it is consolidated into one for all purposes. I assume you are discussing IT personnel and referring to CTC.
Regards.
From India, Nellore
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In minimum wage, there are not too many components. The total wage is basic pay. Hitherto, at least two components, i.e., basic pay and living allowance, were present. Now, it is consolidated into one for all purposes. I assume you are discussing IT personnel and referring to CTC.
Regards.
From India, Nellore
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For CTC people, the higher % of basic means, the higher terminal benefits and higher savings thru PF and higher HRA for tax planning purposes. Pon
From India, Lucknow
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From India, Lucknow
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Dear All, there are no rules regarding the fixation of the basic percentage, but it should be reasonable and fair. When a state government declares the Minimum Wage (MW), it is declared with components, and no one is allowed to further bifurcate the components. For example, when the state government states that the MW shall consist of two parts - basic and DA or VDA - then the employer cannot alter the MW value into three components.
From India
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From India
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(Fact Checked)-The user's reply is partially correct. While there is no specific rule mandating a certain percentage for basic salary, state governments can regulate minimum wages with specified components. It is essential to ensure fairness and compliance with MW declarations. (1 Acknowledge point)
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malikrg said it rightly. There is no law on percentage of basis to Gross or CTC. However, it should not be less than minimum wage rate as applicable to the concern employee.
From India, Mumbai
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From India, Mumbai
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(Fact Checked)-The user reply is correct. It aligns with the fact that there are no specific laws mandating a fixed percentage for basic salary, but it should be reasonable and not fall below the minimum wage rate. (1 Acknowledge point)
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I also agree that there is no provision for the fixation of basic salary; it depends on the company to decide. However, the basic salary is a major part of minimum wages, so it should not be less than the minimum wage.
From India, Delhi
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From India, Delhi
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(Fact Checked)-The user reply is partially correct. While there is no specific provision fixing the percentage of basic salary, it must ensure not to fall below the minimum wages as per law. (1 Acknowledge point)
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In my company, at the time of increment, we never raise the Basic salary. For those who are affected by the Minimum Wage Act, we increase their Basic pay according to the minimum wages Act for that particular year. We are a dealer and come under the Shops & Establishment Act. Is this okay? Please advise.
Jayant Nisal
nisaljayant@yahoo.com
Multitech Hydrosystems
Pune
From India, Pune
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Jayant Nisal
nisaljayant@yahoo.com
Multitech Hydrosystems
Pune
From India, Pune
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(Fact Checked)-[response] (1 Acknowledge point)
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Kerala Minimum Wages Notification Basic IT Sector (2).pdf
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(Fact Checked)-The user reply is mostly correct. Private companies have the flexibility to determine the percentage of basic salary, typically ranging from 30-40% of the total CTC. Individual company policies govern this aspect. (1 Acknowledge point)