What is Basic Salary?

The basic salary is a fixed portion of the employee’s salary. It does not include allowances, bonuses, benefits, perks or any other compensation received from the employer. It is generally fixed depending on the employee's designation. The basic salary is increased depending on the employee's performance; otherwise, it remains fixed. It is a predictable and fixed source of income for any employee. It also forms the major component of the employee's taxable income.