Salary definitions you need to know for calculation of Gratuity, HRA and more!
Not everyone is well versed in financial terms. while it might not be necessary to know every financial term under the sun, it is very important to know a few definitions. Your salary consists of many components such as Basic, HRA, EPF, concessional house and much more. It is very important to know and understand these components so that you get a better understanding of the structure of your salary. Given below are some of the important definitions of the components of your salary.
For the calculation of gratuity covered under the payment of gratuity act
-For the calculation of gratuity covered under the payment of gratuity act</h2>-
For the calculation of gratuity, salary includes only Basic salary and Dearness Allowance (DA). There won’t be any other components that will be considered for the calculation of gratuity here.
For the calculation of gratuity not covered under the payment of gratuity act
- Gratuity can also be calculated for those not covered under the payment of gratuity act.For the calculation of gratuity here, salary includes Basic salary, Dearness Allowance (DA) and Commission (if paid as a percentage of turnover).
House rent allowance(HRA)
House Rent Allowance is paid by the employer to the employee as part of their salary. To calculate House Rent Allowance (HRA) one has to consider Basic Salary, Dearness Allowance(DA) and Commission that is if paid as percentage of turnover. Again in this case too DA need to be considered if it is forming part of retirement benefit otherwise not to consider and Commission also need to percentage of turnover.
Employee Provident Fund(EPF)
To calculate the salary components under employer’s contribution towards the provident fund, one has to consider the same salary components of HRA i,e Basic Salary, Dearness Allowance(DA) and Commission (if paid as percentage of turnover).
In this case also you need to consider the same salary components as you considered for HRA and EPF.
Rent-free/concessional house perquisite valuation
Salary components such as Basic salary, Dearness Allowance, Bonus, Commission, fees, all taxable allowances(excluding amount that is not taxable) and all sorts of monetary payment which is chargeable by tax are considered while calculating the valuation of perquisite.
- Pradhan Mantri Adarsh Gram Yojana
- Rashtriya Krishi Vikas Yojana
- Rashtriya Sam Vikas Yojana
- Sampoorna Gramin Rojgar Yojana
- Shyama Prasad Mukherji Urban Mission
- Sovereign Gold Bond Scheme from Kotak Mahindra Bank
- Swarnajayanti Gram Swarozgar Yojana
- Valmiki Ambedkar Awaas Yojana
- Vikas Yojana Skill India Program
- 4 Essential-documents About Death Claims
- 7 Ways to Check PF Account Balance
- Banking Ombudsman
- Gold Saving Funds vs Gold ETF
- Gramin Bhandaran Yojana
- Gratuity Calculator and How to Calculate Gratuity
- Indira Gandhi Matritva Sahyog Yojana
- Pooled Finance Development Fund Scheme
- Salary Definitions for Calculation of Gratuity HRA
- Sugamya Bharat Abhiyan
- Losing Bank Locker Keys Here What You Need to Know
Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.