Hello everyone, I am seeking advice on the following salary breakdown. It is calculated based on the Karnataka minimum wage for unskilled workers in the Engineering Industry Zone 3.
The breakdown is as follows:
Basic Pay: 4500
Dearness Allowance (DA): 4140
House Rent Allowance (HRA): 3500
Conveyance: 1250
Other Allowance: 3860
Total: 17250
Could you please confirm if this breakdown is acceptable, or suggest any necessary adjustments? Thank you in advance.
From India , Bangalore
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1The breakdown is as follows:
Basic Pay: 4500
Dearness Allowance (DA): 4140
House Rent Allowance (HRA): 3500
Conveyance: 1250
Other Allowance: 3860
Total: 17250
Could you please confirm if this breakdown is acceptable, or suggest any necessary adjustments? Thank you in advance.
From India , Bangalore
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The salary breakdown you have provided appears to be in line with the Karnataka Minimum Wages Act for Zone III. However, there might be some adjustments needed based on the latest revisions of the Act.
Basic Pay and Dearness Allowance (DA)
The Basic Pay and DA are usually calculated as a percentage of the minimum wages. The percentage might vary based on the industry. It's important to ensure that the sum of Basic Pay and DA is not less than the minimum wage prescribed for unskilled labour in the engineering sector.
House Rent Allowance (HRA)
The HRA is typically calculated as a percentage of the Basic Pay. The percentage can range from 10% to 50%, based on your city of residence. Since you are in Bangalore, it should ideally be around 40-50% of Basic Pay.
Conveyance
Conveyance allowance is not a mandatory component and can be decided based on the company's policy. However, it should not exceed the limit set by the Income Tax Act for it to remain tax-free.
Other Allowance
The Other Allowance can be a combination of various allowances like medical allowance, special allowance etc. There's no specific cap on this, but the total salary (including all allowances) should meet the minimum wage standards.
You should also consider the statutory deductions such as Provident Fund (PF) and Employee State Insurance (ESI) while calculating the CTC. You can refer to the https://www.epfindia.gov.in for more information.
Ultimately, it would be beneficial to consult with an HR or Payroll expert to ensure the salary structure is compliant with all legal and tax requirements.
From India, Gurugram
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Basic Pay and Dearness Allowance (DA)
The Basic Pay and DA are usually calculated as a percentage of the minimum wages. The percentage might vary based on the industry. It's important to ensure that the sum of Basic Pay and DA is not less than the minimum wage prescribed for unskilled labour in the engineering sector.
House Rent Allowance (HRA)
The HRA is typically calculated as a percentage of the Basic Pay. The percentage can range from 10% to 50%, based on your city of residence. Since you are in Bangalore, it should ideally be around 40-50% of Basic Pay.
Conveyance
Conveyance allowance is not a mandatory component and can be decided based on the company's policy. However, it should not exceed the limit set by the Income Tax Act for it to remain tax-free.
Other Allowance
The Other Allowance can be a combination of various allowances like medical allowance, special allowance etc. There's no specific cap on this, but the total salary (including all allowances) should meet the minimum wage standards.
You should also consider the statutory deductions such as Provident Fund (PF) and Employee State Insurance (ESI) while calculating the CTC. You can refer to the https://www.epfindia.gov.in for more information.
Ultimately, it would be beneficial to consult with an HR or Payroll expert to ensure the salary structure is compliant with all legal and tax requirements.
From India, Gurugram
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Minimum wage Engineering Industry 2014-15.pdf