What is Base Pay?
‘Base Pay’ or ‘Basic Salary’ is the minimum salary paid to an employee before any kind of bonuses are added or any deductions are performed. It excludes all kinds of bonuses including overtime, insurance, travel allowances, etc. as well as any other kind of incentives like commissions, sales, etc.
The base pay will always remain constant as it is not variable like the other components of the salary. It is affected only by the annual appraisal which would also affect the other components of the salary like PF deductions, professional tax, ESIC, gratuity, etc.
Several factors affect the base pay, such as the designation or seniority of the employee, his/her experience, his/her education level, the location of the company as well as the availability of skilled labor for the position, etc.