Quick Answer: What Is Basic Salary Example?

Is basic salary in hand salary?

Basic salary is the figure agreed upon between a company its employee, without factoring in bonus, overtime, or any kind of extra compensation.

Gross salary, on the other hand, includes overtime pay and bonuses, but does not consider taxes and other deductions.

Say for instance, an employee’s gross salary is Rs..

How can I make a salary slip?

Components of Salary Slip#1 Basic Salary. The Basic salary of the employee is around 35- 50% of the total salary. … #2 Dearness Allowance (DA) … #3 Housing Rent Allowance (HRA) … #4 Conveyance Allowance. … #5 Leave Travel Allowance (LTA) … #6 Medical Allowance. … #7 Bonus Allowance. … #8 Other Allowances.More items…•

What is the meaning of in hand salary?

Take-home salaryTake-home salary or the In-hand salary is the amount which the employee receives after the tax, and other deductions are carried over. The difference between gross and net salary is that the salary that includes the income tax, professional tax, and other company policy deductions subtracted from the gross salary.

What is meant by basic salary?

Basic salary is the amount paid to an employee before any extras are added or taken off, such as reductions because of salary sacrifice schemes or an increase due to overtime or a bonus. Allowances, such as internet for home-based workers or contributions to phone usage, would also be added to the basic salary.

How is basic salary calculated?

Basic Salary – DefinitionAnnual Basic = Monthly Basic X 12. Formula To Calculate Basic Salary. … Gross Pay = Basic + DA + HRA + Conveyance + Medical + Other. Hence, to calculate your basic from the gross pay you need to do the reverse calculation. … Basic = Gross Pay – DA – HRA – Conveyance – Medical – Other. … Basic = Gross Pay X Percentage.

What is the percentage of basic salary?

Usually, the basic salary is 40% to 60% of CTC (Cost to Company). The statutory components: bonus, PF, gratuity and other benefits are determined based on the basic salary. An increase or decrease in the basic salary can affect the employee’s CTC.

How do I create a salary slip in Excel?

Let’s take a look at some of the key parts that are included in a payslip template excel.Personal information. The employee’s name and address will be written for identification purposes.Payroll number. … Tax period. … Tax code. … Gross pay. … Net pay. … Year to Date (YTD) … Social Security number.More items…•

What are the components of basic salary?

Some of the more common components have been stated below:CTC. Cost to company or CTC is different from the in-hand salary. … Gross Salary. … Net salary. … Basic salary. … Allowances. … Employee Provident Fund. … Gratuity. … Professional Tax.More items…•

What will be my in hand salary?

What is the formula for salary calculation? Take Home Salary = Gross Salary – Income Tax – Employee’s PF Contribution(PF) – Prof. Tax. Gross Salary = Cost to Company (CTC) – Employer’s PF Contribution (EPF) – Gratuity.

Is basic pay and basic salary same?

Basic salary refers to the amount of money that an employee receives prior to any extras being added or payments deducted. It excludes bonuses, overtime pay or any other potential compensation from an employer. The whole amount of basic salary is part of the take-home salary. Basic salary is fully taxable.

Why is basic salary 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 is fixed salary?

Fixed monthly salary = basic monthly salary + fixed monthly allowances. Basic monthly salary: This is payment that does not vary from month to month, regardless of employee or company performance, and regardless of whether the employee takes medical or personal leave. … Examples include fixed food and housing allowances.

How do you calculate monthly salary?

Multiply your weekly pay by 52 to find your annual salary. If you are paid bi-weekly, multiply this bi-weekly amount by 26 to find your annual salary. In the above example, $549.60 times 52 gives you $28,579.20 per year. Divide your annual salary by 12 to calculate your salary per month.