Know About The Gross & Basic Salary Structure

Salary components feel a little complex for an unprofessional or one working in the informal sector. That’s because the final CTC or what an employee gets is the only source a consumer considers. But there are no. of components revolve around annual income. That relates to basic salary, net pay, DA, HRA, and so on. Thus, this article can make you aware of the necessary components i.e. gross basic salary. Therefore, one can learn better about the structure which every professional/unprofessional person must know.

What Is Basic Salary?

The basic salary is the basic amount that an employee gets paid in return for his service. This amount is the primary pay for which an employee is hired for a job role. This amount doesn’t include other benefits like DA, HRA, travel allowance, or other benefits. Moreover, this amount is paid as an hourly, weekly, daily wage, or monthly income. Components other than the basic pay depend upon the employee’s work category, employee position, the industry he serves, and so on. Whereas, the other factors include employee talent & negotiations with the company depending upon which his pay scale becomes dynamic. Therefore, an employee gets raise in salary on the basic pay component factor concluding the things which he serves in his job role. That’s all you must surely aware of in the basic pay meaning.

What Is Gross Salary?

Gross salary is the total amount that is deducted for an employee for each month. This includes all the deductions & benefits which an employee is supposed to receive. Furthermore, an employee’s commission pay or overtime pay also includes in the gross pay. In addition, employee tips or bonus pay also include in the total gross amount which is an extension over the basic amount. Furthermore, after excluding all the deductions, which an employee takes in hand becomes the net amount that he takes for home. Therefore, the gross amount is different from the basic & net amount.

How To Calculate The Basic Salary?

After learning about the basic salary, it’s not complex to learn how to calculate the basic salary. Infact, a common person can calculate easily while knowing employee earning credentials. The common formula for an employee’s salary is;
Basic Salary=An employee’s regular pay income*No. Of paying periods;
This formula can be dynamic depending on an employee’s pay on hourly, monthly, weekly, or other paying criteria. Based on this the formula adjusts with paying process. Therefore, an ideal employee gets his monthly pay.

What Is the Basic Salary Percentage?

The basic salary percentage is the amount an employee receives as compared to the overall pay.
As we can easily calculate an employee’s annual basic salary. Thus, here is the formula defined for the employee basic salary percentage;
Basic Pay Percentage=(Basic Pay/Gross Salary)*100;
It usually remains 40-60% of the total gross pay. Rest depends upon the component categories which an organization offers like a bonus, PF deduction, or benefit allowances.

What Factors Affect An Employee’s Basic Salary?

Although, an organization calculates the gross salary with all the inclusions which are specified with an employee’s job role. Whereas, an employee’s monthly basic salary is provided depending upon the following factors.
Based on the above factors, an employee makes & raises his basic salary expectations which raise with time as per his caliber & resilience in the same niche. Whereas, the other dedication & benefits remain static throughout the year. Other components like benefits and deductions increase or decrease depending upon the inflation rate or organization policies.

What Can Be The Best Source For Salary Management?

Salary structure remains quite dynamic in different organizations as per their work standards & amenities they offer. Therefore, every organization manages the concerned platform to make it reachable & aware to each employee.HRMS software is a kind of best source to manage payroll factors. The payroll module in HRMS software presents the existing pay structure. A the same time, calculate basic, gross & net pay for each employee. The backend calculation automatically calculates the salary & percentage for each employee. Choosing the HRMS software avoids unnecessary calculations & analyzing complexity that an organization may feel through the traditional management mode. Therefore, HRMS software not only benefits usual management. Infact, he can get rid of necessary expenses for separate payroll software when the module in one system handles everything. Moreover, the other team members do not need to go with complex calculations when the HRMS software becomes the absolute support for each employee.


Although, understanding the basic salary and gross salary is not difficult from the above-explained criteria. Still, it’s not easy to make instant calculations. That too when the inspection team gets stuck with other issues & demands for instant results. Therefore, HRMS software can provide crystal clear & automated results on the module. Thus, if you look to find a suitable HRMS software product, you must choose hihellohr. As it is the best affordable, device-compatible, instant updation, convenient interfacing & flexible tool to use.

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