How dearness allowances are calculated for employees?

[henrypowell]

Dearness allowances are normally calculated as a percentage of the basic salary of the employee. The government or employer calculates the percentage according to the inflation rates and economic indicators. These allowances are periodically updated, usually every two years. Knowing how dearness allowances are computed will enable the employees to monitor the change in their salary and to better manage their finances.

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