An employee’s basic salary is Rs. 25,000 per month. The company gives a dearness allowance (DA) of 12% of basic, a house rent allowance (HRA) of 15% of basic, and a special allowance of Rs. 3,000. He is also eligible for a performance bonus equal to 8% of his gross salary (basic + DA + HRA + special allowance). Calculate his total monthly gross remuneration.

Step-by-step solution

1. Compute DA: $12\%$ of Rs. 25,000 = $0.12\times 25,000=Rs.3,000$.
2. Compute HRA: $15\%$ of Rs. 25,000 = $0.15\times 25,000=Rs.3,750$.
3. Add basic salary, DA, HRA and special allowance to obtain gross before bonus: $25,000+3,000+3,750+3,000=Rs.34,750$.
4. Calculate bonus: $8\%$ of Rs. 34,750 = $0.08\times 34,750=Rs.2,780$.
5. Add the bonus to the previous gross to get total remuneration: $34,750+2,780=Rs.37,530$.

Concept tested: Compensation and salary calculation

Published 1 October 2026 · How this solution was prepared and checked