How is basic salary calculated from CTC

What Is Basic Salary?

Usually, the 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.8 Şub 2022

Basic salary is always taxable and should, therefore, not be more than 40% of the cost to company. However, it should also not be kept too low since it will then result in reduction in the other constituents of the salary.