by Components of Wages and Basis for Calculation:
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Basic Wages:
The fixed amount of money paid to an employee for their standard working hours.
Basis for Calculation: Usually calculated on a monthly basis and serves as the foundation for other wage components.
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Overtime Wages:
Compensation provided for hours worked beyond the standard or agreed-upon workweek.
Basis for Calculation: Calculated at a higher rate than regular hours, often 1.5 to 2 times the regular hourly rate.
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Dearness Allowance (DA):
An allowance provided to employees to offset the impact of inflation on the cost of living.
Basis for Calculation: Typically a percentage of the basic wage and may be adjusted periodically based on changes in the cost of living index.
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House Rent Allowance (HRA):
An allowance to assist employees in meeting rental expenses for accommodation.
Basis for Calculation: Often a percentage of the basic wage and varies based on factors like location and company policies.
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Special Allowances:
Additional allowances provided to employees for specific purposes, such as travel, education, or special job requirements.
Basis for Calculation: Variable and determined based on organizational policies and employee needs.
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Attendance Bonus:
A bonus given for regular attendance and punctuality.
Basis for Calculation: Calculated based on meeting attendance criteria, usually on a monthly or annual basis.
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Incentive Pay:
Additional pay linked to achieving specific performance targets or goals.
Basis for Calculation: Variable and tied to individual or team performance metrics.
- Shift Differentials:
Additional pay provided for working shifts outside of regular daytime hours.
Basis for Calculation: Calculated as a premium on the regular hourly rate, varying based on the shift schedule.
- Piece-Rate Pay:
Compensation based on the number of units produced or tasks completed.
Basis for Calculation: Quantifiable output, with payment per piece or task completed.
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Night Shift Allowance:
An allowance provided for working during nighttime hours.
Basis for Calculation: Calculated as a percentage of the basic wage and applied to hours worked during specified nighttime periods.
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Leave Travel Allowance (LTA):
An allowance to cover expenses related to employee travel during approved leave periods.
Basis for Calculation: Determined based on organizational policies and government regulations.
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Bonus:
A lump-sum amount provided as a reward, often tied to company profits, festive occasions, or performance.
Basis for Calculation: Can be a fixed amount, a percentage of the basic wage, or linked to specific criteria.
- Gratuity:
A statutory benefit provided to employees upon completion of a specified period of service.
Basis for Calculation: Calculated based on the employee’s tenure and last drawn basic wages.
- Social Security Contributions:
Deductions made for social security programs, such as provident fund (PF) or pension schemes.
Basis for Calculation: Typically a percentage of the basic wage, with contributions from both the employer and employee.
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Employee Provident Fund (EPF):
A mandatory savings scheme where both the employer and employee contribute to the employee’s provident fund.
Basis for Calculation: Calculated as a percentage of the basic wage, with specific rates defined by the EPF rules.
