Basic Pay 50% Rule for Salary Structuring
Salary structuring becomes more balanced when basic pay forms at least half of total compensation. The Basic Pay 50% Rule ensures that core wages are not replaced by multiple allowances and that statutory benefits such as provident fund, gratuity, and leave encashment are calculated on a fair base. Employees benefit from stronger long-term savings and better salary transparency, while employers gain consistent payroll systems and reduced compliance risks.