Basic Salary

Basic salary is the fixed compensation an employer provides to an employee for their work, serving as the core component of their overall salary.

How is basic salary calculated?

Basic salary is typically a fixed part of your total compensation and is calculated based on:

• Job role and level
  
• Industry standards
  
• Company policy
  
• Experience and qualifications
  

There’s no universal formula, but a basic salary usually makes up 30–50% of your total cost to the company (CTC). The rest includes allowances, bonuses, and benefits. Employers determine this amount when making the offer, and it's the foundation for calculating other components like PF, gratuity, and taxes.