Annual Base Pay Structure

Policy description

This policy describes the structure and composition of Annual Base Pay in
India, with its various components. Annual Base Pay in India is structured
in a manner that ensures conformance to the Indian tax framework and
local laws and provides employees flexibility to exercise their choice in
structuring their compensation.

The components of Annual Base Pay may undergo revision to comply with
changes in applicable laws from time to time. Selection of certain Base
Pay components would entail submission of documents as described in
the following sections.

Effective date

The new Base Pay structure is effective October 01, 2019.

Applicability

This policy is applicable to Blue Badge employees of Amazon India - full

time employees (FTEs) and fixed term contract employees (FTCs), except
Fulfilment Center employees and International Workers.

How is my base pay structured?

As a part of Annual Base Pay, every employee will be entitled to a fixed

“Basic” and Provident Fund (PF) contribution from Amazon. Employees
with Annual Base Pay higher than INR 201,600 will also receive House
Rent Allowance (HRA).

Notes

1. The wage ceiling as per the PF Act is INR 180,000 per annum. PF
contribution on this wage would be INR 21,600 per annum. Thus, the
threshold of INR 201,600 per annum has been derived from INR
180,000 of Basic added to INR 21,600 of PF. This threshold will be
subject to revision as and when the applicable PF wage ceiling under
the PF Act changes.
2. In Maharashtra and West Bengal (WB), this threshold has been
determined as INR 210,600, given the statutory requirement of
providing HRA @5% of Basic (Basic INR 180,000, PF INR 21,600, and
HRA INR 9,000).

Employees above this threshold who have residual Base Pay available
after allocation of Basic, PF and HRA components can choose from tax
friendly components namely Self-Education, Children Education
Allowance, Children Hostel Allowance, National Pension System and Self-
Owned Vehicle Expenses. These are collectively referred to as Flexi
Components and employees have the option to select them within the
applicable limits.

Once the flexi components have been selected, employees will receive
fixed allowances in the following order as long as the allocations do not
exceed base pay: (1) LTA, (2) Medical, (3) Conveyance allowance, and (4)
Meal Allowance. The limits under these allowances are either a fixed
percentage of Basic or a flat amount and there is no choice given to
employees. These are therefore referred to as fixed allowances.

Lastly, the residual Base Pay (if any), which has not been allocated under
any of the above, is called Flexi Allowance.

Employees have the option to select and modify their Flexi Components
only once a year, in the month of May. New hires can update their flexi
component selections within the first month of their joining. New hires are
eligible for pro-rated components from their date of joining.

Pay component Description

Basic Basic will be determined as per the following:

 If Annual Base Pay is lower than INR 201,600

there will be only two components in Base Pay:
Basic and Employer PF contribution (12% of
Basic)
 In Maharashtra and WB, if Annual Base Pay is
lower than INR 210,600, Base Pay will consist of
Basic Pay, HRA (5% of Basic in line with statutory
requirements), and Employer PF contribution
(12%)
 In all other cases, Basic will be one of the
following (whichever is higher):
1. INR 15,000 per month.
2. The minimum wage applicable in the
location.
3. Employees’ current selection of Basic as a
percentage of Base Pay or, for new hires
with joining on or after October 1, 2019,
50% of Base Pay
House Rent Except in the States of Maharashtra and WB, HRA is
Allowance (HRA) only applicable for employees with Annual Base Pay
exceeding INR 201,600. HRA will be set as one of the
following (whichever is lower):

1. 50% of Basic Pay

2. Residual Base Pay exceeding (Basic plus PF)

For employees in the states of Maharashtra and WB,

with Annual Base Pay less than INR 210,600, a
statutory HRA of 5% of Basic Pay will be provided. For
employees with Annual Base Pay higher than INR
210,600, the total HRA (inclusive of the statutory HRA
above) will be set as one of the following (whichever is
lower):

1. 50% of Basic Pay.

2. Residual Base Pay exceeding (Basic plus PF)

Employer 12% of Basic Pay, or, for employees with Annual Base
Contribution to Pay higher than INR 201,600 (INR 210,600 for
PF Maharashtra and WB), there is an option to limit to INR
21,600 per annum (INR 1,800 per month).

Flexible
Components#

Self-education Up to INR 350,000 per annum

Children's Up to INR 2,400 per annum (100 per month per child
Education for a maximum of two children)
Allowance

Children's Hostel Up to INR 7,200 per annum (300 per month per child
Allowance up to a maximum of two children)

Self-owned Two wheeler: INR 19,200 per annum.

Vehicle
Expenses** Four wheeler:

 With engine capacity not exceeding 1600 cc – INR

32,400 per annum
 With engine capacity exceeding 1600 cc – INR
39,600 per annum

National Pension Up to 10% of Basic per annum

System (NPS)
Contribution

Fixed Allowances
#

Leave Travel Maximum value (INR): 2.5 months' Basic Pay per
Assistance (1)# annum#

Medical (2) Maximum value (INR): 15,000 per annum#

Conveyance Maximum Value (INR): 19,200 per annum

Allowance**(3)

Meal Allowance Maximum Value (INR): 24,000 per annum

 (4)

Flexi Allowance Unallocated amount after all above allocations

#Subject to tax, if the required tax documents are not provided

( ) The order of allocation among the fixed allowances

** Employees choosing to avail of Self-Owned Vehicle expenses will not be

eligible for Conveyance Allowance.

Note: This policy covers the Annual Base Pay structure. It does not cover
other components of Total Compensation such as Restricted Stock Units
(RSUs) and "Other Cash" components such as Overtime, Night Shift
Allowance, Referral Bonus, and so on.

Fixed components

Basic Pay

Objective

 This is a fixed component of Annual Base Pay paid to all Amazon

employees.
 It is also the prime component of salary on which other components
like HRA, LTA, and so on are calculated.

Limits
Basic will be determined as per the following:

 If Annual Base Pay is lower than INR 201,600 there will be only two
components in Base Pay: Basic and Employer PF contribution (12%
of Basic)
 In Maharashtra and WB, if Annual Base Pay is lower than INR
210,600, Base Pay will consist of Basic Pay, HRA (5% of Basic in line
with statutory requirements), and Employer PF contribution (12%)
 In all other cases, Basic will be one of the following (whichever is
higher):
1. INR 15,000 per month
2. The minimum wage applicable for the location
3. Employees’ current selection of Basic as a percentage of Base
Pay or, for new hires with joining on or after October 1, 2019,
50% of Base Pay
 This will be paid as part of the monthly salary.
Taxation
This component is fully taxable.

Supporting documents to be furnished

No supporting documents need to be furnished.

House Rent Allowance (HRA)

Objective

 This allowance is provided to employees to meet their rental

expenses.
 This is a fixed component of the Annual Base Pay and is payable to
all employees with Annual Base Pay higher than INR 201,600. In
Maharashtra and WB, HRA at 5% of Basic will be a compulsory
component.

Limits

 Only applicable to employees with Annual Base Pay higher than INR
201,600.
 For employees (except in Maharashtra and WB) with Annual Base
Pay higher than INR 201,600, HRA will be taken as one of the
following (whichever is lower):
1. 50% of Basic Pay.
2. Residual Base Pay exceeding (Basic plus PF)
 For employees in the state of Maharashtra and WB with Annual Base
Pay less than INR 210,600, a statutory HRA of 5% of Basic Pay will
be provided. For employees in Maharashtra and WB with Annual
Base Pay higher than INR 210,600, the total HRA (inclusive of the
statutory 5% HRA) will be set as one of the following (whichever is
lower):
1. 50% of Basic Pay.
2. Residual Base Pay exceeding (Basic plus PF)

This will be paid as part of the monthly salary.

Taxation

 The least of the following amounts is exempt:

 Actual HRA received

 Rent paid in excess of 10% of salary

 50% of Basic if the city of residence is one of the Metro cities

(Delhi, Mumbai, Kolkata, or Chennai) and 40% if the residence
is in the other cities.*
  The tax exemption will not be available, if the required documents
are not submitted.

*Tax exemption will be linked to the city of residence as governed by

Income Tax laws.

Supporting documents to be furnished

The following documents are required to be submitted by the employees
to claim tax benefits:

 If the HRA received by the employee exceeds INR 3,000 per month:
original rent receipts/copy of Lease Agreement
 If rent paid by the employee exceeds INR 8,333 per month: PAN of
landlord
 Employees can change their HRA declarations on a monthly basis
from the 3rd – 20th of a month on the Allsec Portal.
 All supporting scanned copies and documents/proofs are required to
be uploaded on the Allsec portal in the month of December and
January of the following year. There will be e-mails from the Payroll
team with detailed instructions in the month of December.
 These limits/amounts and requirements are subject to revision as
per any change in Income Tax law. In case of any
discrepancy between this section and the prevailing provisions of
Income Tax law, the provisions of the law will be applicable.

Guidelines

 HRA exemption will not be available if an employee lives in their

own house or in a house for which they do not pay rent.
 Employees can claim an exemption for rent paid as well as
deduction for interest paid on housing loan, if one of the following
apply:
 The house/property owned by them cannot actually be occupied
by them owing to their employment at another place and residing in
a building not belonging to them at that other place.
 The house/property owned by them has been let out on rent and
the income from the house/property has been taxed.

Employer Contribution to PF

Provident Fund is a defined contribution scheme and governed by “The

Employees’ Provident Funds and Miscellaneous Provisions Act, 1952” and
the schemes made thereunder.

Objective
To provide for retirement benefits
Limits
12% of Basic Pay or, for employees with Annual Base Pay higher than INR
201,600 (except in Maharashtra and WB), an additional option to limit
contribution to INR 1,800 per month or INR 21,600 annually.

For employees working in Maharashtra and WB, the additional option of

limiting contribution to INR 21,600 per annum (INR 1,800 per month) is
provided only if Annual Base Pay is higher than INR 210,600.

Taxation
Employer contribution up to 12% of Basic is exempt.

Supporting documents to be furnished

No documents are required.

* Employee Contribution to PF is not a pay component of Base Pay. It is a

deduction from the Base Pay similar to other deductions and would qualify
for Tax Exemption under Section 80C of the Income Tax Act, 1961.

Flexi components

Employees can choose to allocate the un-allocated amount of their Annual

Base Pay to any of the components from the Flexi Basket, subject to the
maximum limits specified.

Self-Education

Objective

 The objective of this allowance is to promote employee self-learning.

Only employees who are pursuing higher education in an
educational/research institution in relation to current/future work
shall be eligible to choose this component.

Limits

 The maximum limit is INR 350,000 per annum.

 This will be paid upon submission of required documents any time
during the year and tax exemption on the amount will be
provided. Otherwise, it will be paid at the end of the year as a
taxable component.

Taxation

 The actual amount spent towards a course fee by an employee will

be exempt.
 The exemption shall not be available, if the required documents are
not submitted.
Supporting documents to be furnished

 Receipt for a course fee paid along with an enrolment

certificate/course completion certificate from an educational
institution, recognized by the Government of India
 All supporting original documents along with a copy of the
printed Allsec booking page should be dropped in the Allsec drop
box.

Guidelines

 The exemption shall be provided only if an employee is pursuing

higher studies/an additional course that is related to their current or
future work.

Children's Education Allowance

Objective
This allowance is provided to support children’s education.

Limits

 The maximum limit is INR 1,200 per annum per child for maximum
of 2 children.
 This will be paid as part of the monthly salary.

Taxation
The children's education allowance is exempt for flat INR 100 per month
per child for a maximum of 2 children.

Supporting documents to be furnished

 Self-declaration is required from the employee on the Allsec Portal

with the following information at the time of selecting components:

 Number of children

 Number of children studying

 Name of the institute where they are studying

 No other supporting document is required.

Children's Hostel Allowance

Objective
This allowance is provided to support children’s hostel expenses.
Limits

 The maximum limit is INR 3,600 per annum per child for maximum
of 2 children.
 This will be paid as part of the monthly salary.

Taxation
The children's hostel allowance is exempt for flat INR 300 per month per
child for maximum of 2 children.

Supporting documents to be furnished

 Self-declaration is required from the employee on the Allsec Portal

with following information at the time of selecting components on
the comp plan:

 Number of children

 Number of children studying and using the hostel facility

 Name and address of the hostel

 No other supporting document is required.

Self-owned Vehicle Expenses

Objective
This benefit is provided to employees to meet the running and
maintenance expenses of their self-owned vehicle, which is used partly for
official purposes and partly for personal purposes. This component is
available for election for all employees, including those who have opted
for the facility of office transportation. This component is provided for tax
benefit for employees who use their personal vehicles to commute to work
as well as employees to travel to a central pick up point when availing
office transportation.

Limits

 Employees will be eligible for two wheeler or four wheeler vehicle

expense reimbursement (based on the type of vehicle owned by
them), as per the thresholds mentioned below:

 Four wheeler, with engine not exceeding 1600 cubic capacity –

INR 32,400 per annum

 Four wheeler with engine exceeding 1600 cubic capacity – INR

39,600 per annum

 Two wheeler – INR 19,200 per annum

  This amount will be paid monthly.

Taxation

 The amount exempt would be as detailed below.

 In case the vehicle is a four wheeler and is used partly for official
purposes and partly for personal purposes:

 Up to 1600 cc engine – INR 1,800 per month (for vehicle

expenses) and an additional INR 900 per month (for driver
expenses)

 Engine exceeding 1600 cc – INR 2,400 per month (for vehicle

expenses) and an additional INR 900 per month (for driver
expenses)

 Two-wheeler – INR 900 per month

 The tax exemption can be claimed on production of supporting
documents.

Supporting documents to be furnished

 Self-declaration from the employee that the vehicle is used partly

for personal purposes and partly for official purposes
 RC book of the vehicle owned by the employee
 Receipts for expenses incurred on fuel, insurance, repairs and
maintenance expenses, annual insurance expenses, expenses on
accessories, and so on.
 Driver’s license (for 4 wheelers only—to be replaced with any
change in the driver, if any)
 Driver’s salary receipt (for 4 wheelers only—driver acknowledging
receipt of salary—month wise)
 All supporting original documents along with a printed copy of the
Allsec booking page should be dropped in the Allsec drop box on a
monthly basis to avail the tax exemption benefit.

Guidelines

 This component is provided in addition to the facility of office

transportation.
 This component is provided to meet the last mile, as the office
transportation facility is provided from and to a pick up point.
 Conveyance allowance shall not be payable to employees opting for
the vehicle expense reimbursement.

Note that carry forward of fuel bills are not allowed for claiming tax
exemption under self-owned vehicle expenses. A maximum of INR
1800/2400 (4 wheeler) along with INR 900 for driver’s salary and INR 900
(2 wheeler) will be exempted every month subject to bills being submitted
for the same, every month. Note: Separate bill is required for driver’s
salary and fuel.

Any excess value (over and above INR 1800/2400) of fuel bills submitted,
will be forgone and can’t be utilized to claim exemption in
subsequent/prior months

Example:

If I submit 3 bills for INR 2000 each dated May, July and August on
8th August, then Allsec will allow INR 1800 each for May, July and August.

But if I submit a bill for INR 6000 dated August 8, Allsec will allow INR
1800 to be exempted for August only, and INR 4200 will be foregone and
not adjusted for any future or prior months.

Claims will be accepted between 21st of one month to 15th of the next
month except March. In March the portal will remain open only till the
15th due to financial year end.

National Pension system (NPS)

Objective

 NPS is now one of the components available in your Base pay

structure under Flexi components.
 NPS is a voluntary contribution pension scheme for employees (a
retirement savings scheme) offered by Government of India for
Indian citizens. Employees opting for NPS are referred to as
"subscribers."
 It is to be noted that NPS is a market-linked scheme, through
which subscribers can make investments, as per their choice. A
specific part of the investments is allocated towards equity or debt
investments and these investments are subject to market risks. The
returns depend on the selection of investment portfolios and the
applicable market returns.

Eligibility

 Applicable to Indian citizens only.

 Full Time Employees (FTEs) and FTCs at Amazon India are eligible to
opt for NPS on a voluntary basis. FC employees and International
Workers (IWs) are not eligible for NPS.
 Eligible subscribers who are already contributing towards NPS need
not open a new account as existing accounts are portable across
employers (providing NPS) within India.
Contribution/Limits

 Employees can decide to contribute between 1% and 10% of Basic

towards this flexi component in their Base pay structure (decimal
options are not available).
 This contribution can be selected only once on the Allsec portal
during the year, typically in May, when the compensation plan
window opens. No changes are permitted at any other time during
the year.

Taxation
A contribution of up to 10% of Basic towards NPS as opted for in the
compensation plan under flexi components is tax free.

Supporting documents

 Employees who want to subscribe/opt for NPS need to have

a Permanent Retirement Account Number (PRAN) in place.

 If subscriber already has a PRAN in place: Submit “Intra-sector

form” to get the NPS account mapped to the current employer. This
form needs to be filled up and submitted to the HRS team for further
processing.
 If a subscriber does not have a PRAN: Apply for a PRAN by
submitting a duly filled and signed NPS Application Form (SRF –
“Subscriber Registration Form”) to the HRS team for validation and
further steps along with necessary KYC documents.
 Once the form is processed, the subscriber will receive their PRAN
directly from NSDL (national Securities Depository Limited).

Guidelines

 Existing Base pay structure has been restructured to facilitate the

contribution to NPS.
 The contributions will be remitted into the employee’s respective
NPS account through the administrative partner – Point of Presence
(POP), i.e., HDFC Securities, as per scheme structure.
 The NPS contribution will be reflected in your payroll for 90 days
after the contribution even without the PRAN details. However, if the
PRAN details are still not received by payroll (either through POP or
employee), even after 90 days, the accumulated amount, subject to
applicable taxes, will be paid out in the subsequent month’s payroll.
 Transfer of contributions to POP will be possible only after
subscribers have completed the registration process and PRAN
details are received by Payroll either through the POP or the
employee (through the Allsec portal).
 Enrolment window
  Existing employees will have the option available only during
the annual compensation plan window, in May. If NPS is not
opted for during the provided timeline, then next available
opportunity will be during subsequent annual compensation
planning window.

 New hires will have the option to select NPS, after receiving a
communication from payroll. Enrolment requests received on
or before the 20th of the month will be considered in the same
payroll cycle and submissions received after the 20th of the
month will be considered in the subsequent month’s payroll
cycle.

 For further details and FAQs, refer to the complete NPS Policy.

Fixed Allowances

After considering Basic, Employer PF contribution, HRA, and any other

options from the flexi components as may be applicable, an employee
may choose to be paid the following fixed allowances in the same order as
indicated below, subject to availability of an unallocated amount from the
Annual Base Pay.

Leave Travel Assistance

Objective

 This benefit is provided to assist employees in meeting their travel

expenses while proceeding on leave for self and family.

Limits

 A maximum of up to 2.5 times the employee’s Basic Pay

 This will be paid monthly as a taxable component.

Taxation
The amount exempt would be the actual amount spent as follows:

 Where the journey is performed by air: An amount not exceeding

the air economy fare of the national carrier (Indian Airlines) by the
shortest route to the destination
 Where the place of origin of journey and the destination are
connected by rail and the journey is performed by any mode of
transport other than by air: An amount not exceeding an air-
conditioned first class rail fare by the shortest route to the
destination
  Where the place of origin of journey and the destination or part
thereof are not connected by rail and the journey is performed
between such places, the amount eligible for exemption shall be

 Where a recognized public transport system exists, an amount

not exceeding the first class or deluxe class fare, as the case
may be, on such transport by the shortest route to the
destination

 Where no recognized public transport system exists, an

amount equivalent to the air-conditioned first class rail fare,
for the distance of the journey by the shortest route, as if the
journey had been performed by rail

 The exemption shall not be available, if the required documents are

not submitted.

Supporting documents to be furnished

 Air fare ticket along with boarding pass/rail ticket/transport bills

 Leave report as approved by manager from the online leave tool (To
avail of LTA, the employee must avail of at least one day of
approved leave.)
 All supporting original documents along with a printed copy of the
Allsec booking page and form 12BB should be dropped in the Allsec
drop box. Refer to the Allsec portal for form 12BB.

Guidelines

 Leave travel assistance (LTA) covers only the travel costs, towards a
journey within India. Boarding/ lodging/ conveyance expenses are
not included in LTA.
 The tax exemption can be claimed on production of original bills,
anytime during the year.
 The tax exemption shall be available on amount spent for leave
travel incurred for self and family. Family means

 The spouse and children

 Parents, brothers, and sisters who wholly or mainly dependent

on the employee

 The exemption shall be available only to two surviving children of an

employee after 1st October, 1998after 1st October, 1998.
 The exemption can be claimed for 2 Journeys in a block of four years
(Current block: Jan 2022 to Dec 2025) and only once in a year.
 If an eligible employee has not availed their LTA during any block of
four calendar years, an amount of the LTA, first availed of by the
employee during first calendar year of the immediately succeeding
 block of four calendar years shall be eligible for exemption, in
addition to 2 journeys for that block.

Medical

Objective
This allowance is paid to assist employees in meeting health check-up
expenses for self, and medical expenses and medical insurance premiums
for self/parents.

Limits

 INR 15,000 per annum

 This will be paid monthly.

Taxation
The total amount received as Medical will be taxable as there is no
specific exemption under the Income Tax Act. However, a deduction can
be claimed u/s 80D from the taxable income (subject to limits specified)
for medical insurance paid for self/spouse/dependent children/parents.

Supporting documents to be furnished

If an employee has paid premiums for medical insurance, the employee
can claim deduction u/s 80D and would need to submit the documents in
the month of December as part of investment proofs collection.

Conveyance Allowance

Objective
This allowance is paid to assist employees to commute from home to
office and back or home to pick-up point and return in case of availing
company transport.

Limits

 INR 19,200 per annum

 This will be paid monthly.

Taxation
The total amount received would be taxable as there is no specific
exemption under the Income Tax Act.

Supporting documents to be furnished

There is no requirement for the employee to submit any document.

Guidelines

 This component is provided in addition to the facility of office

transportation/cash in lieu of office transportation. This component
 is provided to meet the last mile, as the cab facility is provided from
and to a pick up point.
 Conveyance allowance shall not be payable to employees opting for
self-owned vehicle expense reimbursements.

Meal Allowance

Objective
This allowance is paid to assist employees in meeting the expenses for
meals or other expenses towards meals.

Limits

 INR 24,000 per annum

 This will be paid monthly.

Taxation
This allowance is fully taxable.

Supporting documents to be furnished

There is no requirement for the employee to submit any documents.

Flexi Allowance

Objective

It is the unallocated amount that remains after all the above-

mentioned allocations (after adjusting the Fixed and the Flexi
components) are made.

Limits

 Unallocated amount after all above allocations

 This will be paid monthly.

Taxation

This allowance is fully taxable.

Supporting documents to be furnished

No supporting documents are required.