Gross Salary:

A gross salary is a gratuity and EPF (employee provident fund) subtracted from the cost to the company. The components of Gross salary consists of the following:

The components of a gross salary include several benefits, some of which are elaborated below:

• Basic Salary: It is the fixed sum paid out directly to an employee. It is not inclusive of bonuses, incentives, benefits or any such perks from an employer.
• House rent allowance or HRA: It is a salary component that covers the housing expenses of employees.
• Employee contribution to the Provident Fund (PF): Both an employer and an employee contribute 12% of the employee’s basic salary to the Employment Provident Fund or EPF every month.
• Perquisites: Perquisites are benefits provided to an employee in addition to the basic salary and specific allowances. These can be termed as benefits received by an employee as a direct result of his/her stature in an organisation. These perquisites are monetary or non-monetary benefits payable in addition to the salary and allowances to an employee.
• Salary Arrears: An employee becomes entitled to arrears due to the increment in the salary. Arrears can be defined as an amount paid to an employee as a result of an increment or hike to their salary.