It is the core salary of an individual.
The Government determines the minimum wage rates for Basic salary. The same is announced by the Government according to the tome period specified for each State
You can refer : http://www.paycheck.in for the Minimum Wages for different states.
For E.g : In Maharashtra the Minimum Wages slab are declared from half yearly
- 01 January to 30 June
- 01 July to 3 December
The Minimum Wage Slabs are bifurcated across Industries. Each Industry will have the manpower classified as Highly Skilled, Skilled, Semi-Skilled, Unskilled
Hence it is essential while that a salary structure has basic salary as per the slabs mentioned in the Minimum Wages Act.
Generally all statutory liabilities / calculations are determined on the basic salary.
E.g Dearness Allowance ,Provident Fund, Bonus , Gratuity etc.
Dearness Allowance (DA) is a cost of living adjustment allowance. DA is some fixed percentage of the basic salary. DA is provided to employees to neutralize the impact of inflation on their earnings.
As DA is directly related to the cost of living, the DA component differs for different employees based on their location. That is DA is different for rural, urban , semi-urban areas.
There are two types of DA.
- DA given under terms of employment
- DA not given under the terms of employment
The Government announces the DA percent for the year basis certain calculations as per All India Consumer Price Index.