Basic Salary

Basic salary is the fixed and guaranteed part of an employee’s pay that forms the foundation of the total salary structure and is paid before adding allowances or deducting taxes and other contributions.

Highlights of Payroll and Compensation

• Payroll solutions provide the basic components of CTC and gross salary.
• Used for calculating PF contributions, gratuity and leave encashments.
• Payroll remains constant through all payroll cycles.
• Payroll Solutions are tracked, managed, or reported using payroll systems and HRMS.

Legal Compliance / Policies / Regulations (India) 

The calculation of basic salary must conform to the following legal bases in India:

• Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.
• Payment of Gratuity Act, 1972.
• Code of Wages, 2019 (definition and structure of wages).
• Company compensation and payroll policies.

Incorrect structuring will result in a failure to comply with statutory requirements.