What is Fixed pay?

Posted on 09th Jul 2018 | 1045 views

4 avg. rating (80% score) - 1 votes

Annual fixed salary:

Annual fixed salary is the salary package offered per annum to the employee at the time of recruitment. Annual salary is the combination of fixed salary and variable pay. A certain percent of annual salary is accounted into variable pay. Annual salary is defined as the gross amount earned by the employee throughout the year and the incentives received during his/her service for that year.

What is fixed salary

What is fixed salary:

What is fixed salary, defined as the equal proportions of the amount earned by the employee through his/ her work on a monthly basis during the current year. Fixed salary comprises of basic pay along with other allowances such as DA (Dearness allowance), TA (Travel allowances), HRA (House rent allowances), and Conveyance allowances etc. Fixed salary comes with tax deductions, EPF scheme etc. Fixed salary is described as a guaranteed monthly wage paid to the employee for his/ her minimum services to the organization.

Fixed salary and variable salary combined together gives the total annual salary but the fixed pay is a monthly basis pay whereas variable pay is paid quarterly, half yearly or yearly. Variable salary is related to the work performance of the employee and its calculation is based on company terms and condition. Variable salary is a type bonus or incentive rewarded to the employee for meeting the goals.

Cost to Company or CTC fixed and variable pay is calculated as fixed pay (X% of the package offered) plus variable pay ( 100-X% ). CTC is a composition of the total expenditure of an employee including special allowances, basic pay, and incentives. The base salary which is definite regardless of the employee performance including other allowances minus tax on a monthly basis is defined as fixed pay and variable pay is a bonus or reward given to the employee for his/her high standard of performance in the company for the current year and is taxable.

0 Comments on What is Fixed pay?

Comment as a guest:

POPULAR POSTS

What is Appointment letter Format?

26th Jun 2018

Top 10 facts why you need a cover letter?

08th Jun 2018

Are you looking for a job in Event Management?

28th May 2018

Pharmaceutical job opportunities on rise in Gulf

23rd May 2018

MNC Vs Startup: Are you Confused to Choose between?

09th Aug 2017

Perspectives of Unemployment in India

01st Jul 2013

Have your Say!

View All

How consistently does your organization reward you for good work?


Very difficult

Reasonably consistently

Not at all consistently

Vote

Press Corner

View All

All rights reserved © 2018 Wisdom IT Services India Pvt. Ltd DMCA.com Protection Status