Salary can be given under various heads, broadly classified into Earnings (which add to the salary) and Deductions (which are subtracted from the salary). The exact structure depends on company policy, statutory requirements, and employee agreements.
Earnings Components (Salary Heads)
Basic Salary – Fixed base component of salary, usually a percentage (40-50%) of CTC.
Dearness Allowance (DA) – Provided to compensate for inflation, mostly in government jobs.
House Rent Allowance (HRA) – Paid to employees for house rent expenses (tax-exempt up to limits).
Conveyance Allowance – Given for daily commute expenses (now merged with standard deduction in taxation).
Medical Allowance – A fixed monthly allowance for medical expenses.
Special Allowance – Variable component; can be performance-based or a balancing figure in CTC.
Leave Travel Allowance (LTA) – Given for travel expenses while on leave, tax-free if used for travel.
Bonus / Performance Incentive – Based on performance metrics, can be monthly/quarterly/annually.
Overtime Pay – Compensation for extra working hours.
Shift Allowance – Given for working in odd shifts, such as night shifts.
Project/Client Allowance – Paid for working on specific client projects.
Food Allowance – Can be meal coupons or direct cash reimbursement.
Uniform/Attire Allowance – If the company requires specific uniforms or dress codes.
Car Allowance/Fuel Reimbursement – If the employee uses a vehicle for official duties.
Education Allowance – Reimbursement for children’s education.
Provident Fund (Employer’s Contribution) – Employer’s share to EPF (not part of take-home salary but part of CTC).
Gratuity – Statutory retirement benefit, part of CTC but not monthly salary.
Deductions (Salary Heads)
Provident Fund (PF) Deduction – Employee's contribution to EPF (12% of Basic + DA).
Professional Tax (PT) – State-specific tax deducted from salary.
Income Tax (TDS) – Deducted as per employee’s taxable income slab.
Employee State Insurance (ESI) – Applicable if gross salary is below ₹21,000/month.
Loan/Advance Repayment – If the employee has taken any company loans.
Salary Recovery – Any deductions for absences, advance salary, or penalties.
Other Salary Components
Ex-Gratia – Additional benefit at the discretion of the employer.
Variable Pay – Linked to performance or company profits.
Stock Options (ESOPs) – Compensation in the form of company shares.
From India, Gurugram
12Earnings Components (Salary Heads)
Basic Salary – Fixed base component of salary, usually a percentage (40-50%) of CTC.
Dearness Allowance (DA) – Provided to compensate for inflation, mostly in government jobs.
House Rent Allowance (HRA) – Paid to employees for house rent expenses (tax-exempt up to limits).
Conveyance Allowance – Given for daily commute expenses (now merged with standard deduction in taxation).
Medical Allowance – A fixed monthly allowance for medical expenses.
Special Allowance – Variable component; can be performance-based or a balancing figure in CTC.
Leave Travel Allowance (LTA) – Given for travel expenses while on leave, tax-free if used for travel.
Bonus / Performance Incentive – Based on performance metrics, can be monthly/quarterly/annually.
Overtime Pay – Compensation for extra working hours.
Shift Allowance – Given for working in odd shifts, such as night shifts.
Project/Client Allowance – Paid for working on specific client projects.
Food Allowance – Can be meal coupons or direct cash reimbursement.
Uniform/Attire Allowance – If the company requires specific uniforms or dress codes.
Car Allowance/Fuel Reimbursement – If the employee uses a vehicle for official duties.
Education Allowance – Reimbursement for children’s education.
Provident Fund (Employer’s Contribution) – Employer’s share to EPF (not part of take-home salary but part of CTC).
Gratuity – Statutory retirement benefit, part of CTC but not monthly salary.
Deductions (Salary Heads)
Provident Fund (PF) Deduction – Employee's contribution to EPF (12% of Basic + DA).
Professional Tax (PT) – State-specific tax deducted from salary.
Income Tax (TDS) – Deducted as per employee’s taxable income slab.
Employee State Insurance (ESI) – Applicable if gross salary is below ₹21,000/month.
Loan/Advance Repayment – If the employee has taken any company loans.
Salary Recovery – Any deductions for absences, advance salary, or penalties.
Other Salary Components
Ex-Gratia – Additional benefit at the discretion of the employer.
Variable Pay – Linked to performance or company profits.
Stock Options (ESOPs) – Compensation in the form of company shares.
From India, Gurugram
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Salary slip final.xls
Salary slip.doc