How to Calculate Basic Salary, its Factors, Different Components & Rules

What is Basic Salary?

Formula to Calculate the Basic Salary

Let’s look at some examples to develop a clear idea –

For instance, the following is the salary chart of an individual named A.

Components Amount
Gross Pay ₹25,000
Basic Salary 40% of gross pay (basic salary calculation formula 1)
Basic Income ₹10,000

Conversely, consider an individual named B who has the following salary break-up.

Components Amount
Gross Pay ₹40,000
Basic Salary 50% of the CTC (basic salary calculation formula 2)
Basic Income ₹20,000

Now that you know the basic pay calculation formulae, let’s check the factors affecting them.

Components of Basic Salary

How is the Basic Salary Calculated?

Calculate Basic Salary from Gross Salary

Let’s take an example to understand the concept better.

Factors Amount
Gross Salary ₹30,000
HRA ₹2000
DA ₹1000
Conveyance ₹1000
Medical ₹5000
Other Allowance ₹3000
Basic Pay ₹21000

However, if a company applies a percentage formula, it will be 40% of the gross salary or 50% of CTC, as already mentioned.

An individual’s take-home salary will be calculated by removing all the deductions such as pension, TDS, insurance, etc.

One can use a calculator or Excel sheet to find precise results quickly.

Calculate Basic Salary from CTC

Additions to Basic Salary

Deductions to Basic Salary

What are the Pros and Cons of Lower Basic Salary?

FAQs about Basic Salary