A cost-of-living allowance, common in government and PSU pay structures, that adjusts with inflation.
Dearness Allowance is a cost-of-living adjustment paid on top of Basic Salary, historically most common in government, public sector, and PSU pay structures, though some private companies use it too. It's revised periodically to offset inflation and is calculated as a percentage of Basic Salary.
Where DA is part of a salary structure, statutory calculations like PF and gratuity typically use "Basic Salary plus DA" as the base figure rather than Basic Salary alone — worth checking on any payslip that includes a separate DA line.
MedleyHR handles PF, ESI, TDS, and Form 16 automatically — free for up to 10 employees. Start free →
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