Fixing salary, creating breakups and then to process it should follow numbers of labour laws.
Salary should be fixed equal or above to the minimum wages of the state.
Once it is done, then you need to create salary breakup. Eg.
Basic=50% of gross or minimum wage whichever is higher.
HRA=40% for non metro and 50% for metro cities.
Medical = 1250
Special = Rest amount of gross.
PF=12% of basic
ESI=1.75% of gross.
Pl.note. PF is applicable only if basic is equal to or less than 15000.
ESI is applicable only if gross is equal to or less than 15000.
The above structure is very basic structure. However there might be other kinds of deductions like PTax, if applicable and TDS. The tax liability can be decreased with tax-saving salary structure.
So for step by step and detailed method and to help you to create payroll sheet , you may write to
20th December 2015 From India, Delhi
You have not provided the details of your small firm. What is the activities or business. Unless we know the objects of your firm we are unable to give our opinion the applicability of Indian Labour Laws, as they are differ from each other.
Labour Laws Consultant
22nd December 2015 From India, Bidar