Hi Ayesha,
Processing Classes in wagetypes are actually some specification which we should give to wagetype if we want it to be processed in a particular way. As suggested by swapnil you can check the table V_512W_D for the different processing classes available in system.
When you have a custom wage type you need to identify how the wage type should be processed.
In your case as you say it is part of basic salary and needed to be added to gross salary you can copy the same processing classes as BASIC PAY wage type.
