To calculate basic salary from CTC you need to know about the basic salary percentage in your salary structure. In general, companies fix 40-60% of gross wage as basic salary. Companies need to adjust the basic salary percentage based on the minimum wage rates fixed in your state.
Basic salary is always calculated on the gross salary. Before knowing about how to calculate basic salary in CTC, have a look at what is CTC and Gross Salary, so that you can understand the remaining concepts well.
CTC (Cost to Company) = Gross Salary + Benefits Given By Company ( Like PF, ESI, Insurance, Gratuity, Bonus, Etc…)
Gross Salary = Basic Salary + Allowances ( Like HRA, Conveyance, LTA, Special Allowances Etc…)
Basic Salary Example in CTC
|Employee gross salary (Manager Cadre)||30,000 Rs per month|
|Minimum wage rate in that state (For Manager Cadre)||12,000 Rs|
|Now the minimum basic salary percentage should be||40% (Because 40% on 30000 Rs|
= 12,000 Rs)
Note: Here the 40% becomes the minimum basic salary percentage and the company can fix more than 40% also based on their willingness. But a minimum of 40% is mandatory in this case.
How to Know Minimum Wages in Your State
You can get the latest minimum in your state from your state government labour welfare department website, Or there are so many other websites which also provide the latest minimum wages details.
How to Know your Gross Salary
The best way to know your gross salary is, finding it from your payslip or from your offer letter or appointment.
Every company while issuing appointment letter or offer letter will mention the salary structure. From there you can easily know your gross salary.