Basic Pay Calculator
In this article, you will learn about what basic pay is, and how the above tool calculates the basic pay from the gross salary of an employee.
What is Basic Pay
It is the amount of money an employee receives before any additional allowances or perks are added. It serves as a base, to which other allowances, benefits and perks are added and together all of them make an employee’s gross salary. It is also known as base pay, base salary or basic salary.
What is Gross Salary
Gross salary is basic pay plus all allowances. The allowances admissible to government employees are;
(1) Dearness Allowance; It comes as a percentage of basic pay. It is given to an employee to combat the rising inflation, and is revised after every six months by the government.
(2) House Rent Allowance: It also comes as a percentage of basic pay. Currently there are 3 rates for house rent allowance.
- 10 % for x cities
- 20% for y cities, and
- 30% for z cities.
(3) Travel allowance. It is a fixed sum given to a govt employee to meet his travel expenses during the course of his official duty.
(4) Medical allowance: It is also a fixed, but nominal sum, given to the government employees to meet their medical expenditure.
(5) Other allowances: These include allowances like Children education allowance (CEA), and other special allowances.
All these allowances along with the basic pay form the gross salary of an employee.
Net Salary
Net salary is the salary received after all the mandatory deductions. The deductions can be the contribution towards NPS corpus, GPF or any other fund.
How Basic Pay Calculator Works
Basic Pay calculator asks you to give the following inputs;
- Gross salary
- DA%
- HRA%
- TA
- CEA
- any other allowances.
It then makes use of a formula to arrive at a result. When you click on the calculate button, the result gets displayed.
Use of Basic Pay Calculator
The basic pay calculator helps you in arriving at your basic pay, which is then required for;
- filling details in various forms.
- calculation of NPS contributions.
- Calculation of UPS pension. Check our UPS pension calculator.
- estimating the hike in your pay after pay revisions, especially the most awaited 8th pay commission. Check our 8th pay commission calculator.
So, this was all about the basic pay calculator from gross salary. We are sure that you have loved using this tool and hope that you will share it with your friends.