Salary Slip Components Explained

For many employees, the salary slip is just a number at the bottom. But for HR, it is a strict legal document combining labor laws and tax rules.

Earnings

• Basic: The foundation of the payslip. Usually 50% of the Gross.
• HRA: Given to help with housing costs.
• Special Allowance: Fully taxable balancing component.

Deductions

• EPF (Employee Provident Fund): 12% of the Basic salary deducted from the employee's side (matching the employer's contribution).
• ESI (Employee State Insurance): 0.75% of Gross, applicable only if Gross is ₹21,000 or below.
• PT (Professional Tax): A state-level tax (typically ₹200/month) applicable in states like Maharashtra, Karnataka, and Telangana.
• TDS (Tax Deducted at Source): Income tax deducted based on the employee's projected annual income and chosen tax regime.