Can Anyone Explain About Payroll Calculation

hi friends,
want to know how salary is calculated with also terms like income tax,hra,fbt . i saw a pay slip and was difficulty to understand. i think u got my question, if not pls let me know i will ask in clear way
thanks in advance
kunal

Hi Kunal,
Salary structure varies organization to organization. Like for example some organization provide 60% basic + Dearness Allowance and 40% other Allowances like HRA, Conveyance etc. So based on the basic your PF share (i.e. 12%) will be deducted.
Re Income Tax, TDS depends on the slab in which your salary falls. Hope you know about Income Tax Slabs, if not lemme know.
I think it gives answer to your queries, if not feel free to message.
Thanks,
Garima

Hi,

To add further to this discussion, there are different things which should be taken care by you and some are as follow,

1. You should know which are the Allowances which are Fully Taxable, Partialy Taxable and Fully Exempt.

2. To Calculate the Tax for your Employees you should also have the knowledge on Perquisites, like which are the Taxable Perqs and which are Exempted from the Tax.

3. After conscidering the above things you should take into conscideration the Investment made by your Employee.

4. In the Payslip there are various deduction like PF (which is 12% of Basic), ESIC (1.75% of Gross Salary) and Profession tax depending on the State as well as Salary.

5. Tax Computation slabs (General)

0 - 1.00,000 = Nil

1,00,001 - 1,50,000 = 10%

1,50,001 - 2,50,000 = 20%

2,50,001 and above = 30%

for Women the Exemption limit is upto 1,35,000 and for Senior Citizen it is upto 1,85,000

If you have further queries do contact me on [Login to view]

Thanks and Regards,

Amol Agaskar (SR. HR Executive - HR Operations)

HRprowess

Dear Kunal,
You should be concerned more about the deductions related to the HR Deptt. like PF, ESI. Regarding others (Income Tax, FBT etc ) you should take the reference from your Accounts Deptt.
However for your knowledge you can go through the Ready Recknower of Income Tax.
Thanks
Aditya