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BASIC SALARY-new rule

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This query is : Resolved

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A new rule under the Labour Code mandates that employee allowances cannot exceed 50% of the total Cost to Company (CTC). This means an employee's basic salary must constitute at least 50% of their gross salary. Previously, there was confusion about whether basic salary itself was capped, but the clarification confirms it's the allowances that are limited.

Ritu

Ritu (Querist)
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04 August 2021 Sir/Madam,
Is there any rule that the basic salary would be 50% only (and not more than that) of gross salary , if gross salary reached at certain limit???????????????

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 August 2021 It's only allowances caped at 50% and not to the basic salary.
The most prominent rule under the new Labour Code is the mandate to cap employee salary allowances at 50 per cent of CTC (cost-to-company). This means the basic salary of an employee has to be at least 50 per cent of CTC

Ritu

Ritu (Querist)
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04 September 2021 Ok Sir.....Thank you so much for your reply.

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