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Salary Structure Design

How to design tax-efficient salary structure for employees including components and optimization.

Alok K Acharya & Associates
1 February 2025·Updated 31 August 20261 min read
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Salary Structure Design#

Components of Salary#

Fixed Pay#

  • Basic salary
  • DA
  • HRA
  • Conveyance allowance
  • Special allowance

Variable Pay#

  • Performance bonus
  • Commission
  • Leave encashment

Benefits#

  • Medical
  • Transport
  • Food coupons

Tax-Efficient Structure#

  • Maximize HRA
  • Include conveyance
  • House loan interest
  • NPS contribution

Conclusion#

Well-designed salary structure reduces tax burden.

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