BASIC SALARY
Basic Salary
Basic salary is the fixed amount of income paid to an employee by an organization, forming the core of their overall compensation. Allowances and benefits are calculated on the basis of basic salary.
Components of Basic Salary
- Gross Salary: Calculated from the CTC, gross salary represents the total compensation before deductions. After deducting Provident Fund (PF) and Gratuity, the remaining amount contributes to the basic salary.
- Overtime Payment: Additional payment for work done outside regular hours.
Bonus: Additional compensation provided by the employer, often linked to company profits or individual performance.
- Dearness Allowance (DA): Adjustment to cope with the changing cost of living due to inflation.
- House Rent Allowance (HRA): Assistance provided for rental accommodation, calculated based on factors like location and cost of living.
- Special Allowances: Fixed amount offered for personal or official needs beyond the basic salary.