There is a query I have, which one of the CAs had asked me. Is it a rule that the basic salary should not be less than the total of the allowances (HRA + Conveyance + performance)?
Also, I would be glad if you could assist me in designing the most appropriate salary calculator. I belong to the IT industry.
Thanks! Rupali Varma
From United States, Cambridge
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2Also, I would be glad if you could assist me in designing the most appropriate salary calculator. I belong to the IT industry.
Thanks! Rupali Varma
From United States, Cambridge
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Hi Rupali,
The contents of the salary breakup are as follows. You can prepare it according to your own suitability. HRA would be 50% or 60% of the basic salary.
- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per Month
- Gross Per Month = Sum of all the above
- Gross Per Annum = 12 * Gross/Month
- PF Contribution = 12% of Basic/Annum
- ESI Contribution = 4.75% of Gross/Annum
- Medical: The mediclaim facility is provided to employees who are not covered under ESI, as the maximum ceiling for ESI is ₹10,000 per Month. Amounts exceeding this will be covered under Mediclaim or as per company policy.
- Ex-Gratia/Bonus = A fixed bonus amount
- Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
- Annual Total Cost = AFGC + PF + ESIC
- Annual total cost is also referred to as CTC.
I hope this is clear to you now. Feel free to ask if you have any queries.
Regards,
Amit Seth.
From India, Ahmadabad
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The contents of the salary breakup are as follows. You can prepare it according to your own suitability. HRA would be 50% or 60% of the basic salary.
- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per Month
- Gross Per Month = Sum of all the above
- Gross Per Annum = 12 * Gross/Month
- PF Contribution = 12% of Basic/Annum
- ESI Contribution = 4.75% of Gross/Annum
- Medical: The mediclaim facility is provided to employees who are not covered under ESI, as the maximum ceiling for ESI is ₹10,000 per Month. Amounts exceeding this will be covered under Mediclaim or as per company policy.
- Ex-Gratia/Bonus = A fixed bonus amount
- Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
- Annual Total Cost = AFGC + PF + ESIC
- Annual total cost is also referred to as CTC.
I hope this is clear to you now. Feel free to ask if you have any queries.
Regards,
Amit Seth.
From India, Ahmadabad
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Thanks for your inquiry!
Is it a rule that the basic salary should not be less than the sum total of the other allowances? Our salary calculator is as follows:
Basic
HRA (50% of basic)
Conveyance Rs. 800/- per month
Performance Allowance (30% of basic)
Dress allowance (remaining figure)
Please suggest.
From United States, Cambridge
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Is it a rule that the basic salary should not be less than the sum total of the other allowances? Our salary calculator is as follows:
Basic
HRA (50% of basic)
Conveyance Rs. 800/- per month
Performance Allowance (30% of basic)
Dress allowance (remaining figure)
Please suggest.
From United States, Cambridge
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the rule is : basic salary < total of all allowances? basic salary = total of all allowances? basic salary > total of all allowance?? Please clarify. Am really confused.
From United States, Cambridge
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From United States, Cambridge
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Hi Rupali, There is no any written rule regarding this... basic can be less than other allowances.. even it is in practice with some companies... Regards, Amit Seth.
From India, Ahmadabad
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From India, Ahmadabad
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There is not rule regarding proportion of basic and allowances. Either you have misunderstood the CA or he is under wrong impression. - Hiten
From India, New Delhi
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From India, New Delhi
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Dear Rupali..... There’s no written rule that Basic should not be less than the total of allowances. Regards, Bhavna
From India, Lucknow
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From India, Lucknow
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To my knowledge also there is no rule for the salary break down. In some companies they calculate the salary back up with very less basic so that the PF contribution will be less. Vasanthi
From India, Madras
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From India, Madras
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