Why basic salary is important?
BASIC SALARY It is vital to decide how much of your CTC should make up the basic salary, because it is fully taxable.
If the basic is too high, your tax liability will shoot up.
Other components of salary exemptions, such as the HRA and Provident Fund benefits, are linked to basic pay..
What should be the basic salary?
Usually, basic salary is 40% to 50% of CTC (Cost to Company). Statutory components such as bonus, PF, gratuity and other benefits are determined on the basis of the basic salary. Any increase or decrease of basic salary can affect an employee’s CTC.
What is retrial salary?
The Retiral benefits are: Provident Fund. It’s a retirement plan for the private and public sectors, intended to help employees save a certain portion of their salary in the event of retirement, disability or unemployment.
Can the basic salary be reduced?
You cannot reduce the basic salary of any employee. Please understand that all the statutory deductions like PF, gratuity, superannuation are based on it. The quantum of deduction cannot come down from a given level.
What are special allowances in salary?
Special allowance is a fixed amount that is given to employees over and above the basic salary in order to meet certain requirements. There is a taxable allowance and an exempt allowance. There are different categories of special allowances.
Can we change basic salary of an employee?
employer has the right to change the basic as long as your gross does not get reduced or affected.