Glossary · HR, Payroll & Labour Law
Salary Structure
The breakdown of an employee's total compensation into components like basic salary, HRA, special allowances, and other benefits for tax and compliance purposes.
A typical Indian salary structure has Basic (40-50% of CTC), HRA (50% of basic for metros, 40% for non-metros), Special Allowance (balancing figure), Conveyance, Medical, LTA, and employer's PF contribution. The structure is designed to optimise take-home and tax savings. Section 17 of the Income Tax Act mandates perquisite valuation, while Section 80C benefits require specific components like EPF, PPF, and ELSS. Provident Fund is calculated on basic + DA only.
Examples
A ₹12 lakh CTC salary: Basic ₹5L, HRA ₹2.5L, Special Allowance ₹2.5L, Conveyance ₹19,200, Medical ₹15,000, Employer PF ₹78,000, total = ₹10.62L, rest as variable pay.