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Human Resources » Compensation & Benefits

Chrm Message From: suraj2 Total Posts: 19 Join Date: 10/09/2009
Rank: Executive Post Date: 17/09/2009 10:12:38 Points: 95 Location: India

Dear All,

I have recently joined a company. Here what I found is that the Basic of all employee is very less, It's not even 10% of the CTC. Can any body help me out about the details how the pay structure should be. As per my knowledge the basic pay should be 50% of the CTC. Is this correct? Can anybody provide me the link or book name which provides me the legal aspect of Basic Pay.

Thanks in advance


Chrm Message From: sheetalan Total Posts: 3 Join Date: 10/09/2009  
Rank: Beginner Post Date: 13/11/2009 05:56:41 Points: 15 Location: India

Salary norms are pre-defined by the respective companies. pls refer the salary strcuture we follow-

Basic Salary -25000 (50% of total salary)

HRA-12,500 (50% of basic salary)


Medical Reimbursement-1250

Provident fund-3000 (12% of basic salary)

Special Allowance-7450



Chrm Message From: varadharajen Total Posts: 7 Join Date: 10/09/2009  
Rank: Beginner Post Date: 17/11/2009 02:16:44 Points: 35 Location: India

Hi all,

The following may be taken into consideration for salary break ups:

Basic  50% of Total CTC

HRA 40 % on Total Basic

Conveyance Rs.800/- pm (maximum) which is only allowed as exemption under IT, i.e. Rs.960/- per year.

Medical maximum of Rs.1250/- p.m as per IT Act, i.e. yearly Rs.15000/-.  In case the fixed basic salary is below Rs.15000/- pm. then it can be calculated at 8.33% on total basic as Medical Allowance (reimbursement)

If you are paying LTA monthly, then it can be 8.33% on Total Basic.

Hope, this clarifies your doubt





Chrm Message From: vangapandu Total Posts: 4 Join Date: 10/09/2009  
Rank: Beginner Post Date: 25/11/2009 10:44:08 Points: 20 Location: India


there was nothing fixed in the PF act that basic should be 50% of basic. However keeping in mind of Social security benefit PF authorities have made it mandate that basic should not drop below 40% on gross.. Hence bais can be from 40%.. If the employer is so concerned about the share there is always a provision that the employer can restrict his contribution to the basis Rs.6500 i.e. Rs.780.. If this is understood and followed there won't be any hassles of keeping basic low.




Chrm Message From: harindra Total Posts: 11 Join Date: 10/09/2009  
Rank: Executive Post Date: 12/12/2009 16:59:38 Points: 55 Location: India
Dear friends,

There is no specific rule or regulation under any statute to follow a prescribed % should be kept as Basic Pay.  However, in general, many organisations fix Basic pay ranging from 30 % to 60% out of CTC. 

Further, we have to make sure that the minimum wages stipulated to a particular category under a given scheduled employment,  be given by way of Basic pay + D A only.  For example, minimum wage for an operator is Rs.6000/-  p.m(basic +da) in a particular schedule employment,   you should make his salary structure accordingly and you should not make the structure like 60% basic ie., Rs.3600/-  and Rs.2400/- as other allowances such as special allowance, conveyance allowance etc.


Harindra Gk

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