Mandatory components in Payslip

Ask the Community Payroll
1

Hi community-

Wanted to understand what are all the mandatory components to be available in a payslip for an employee with less than 50k salary?

Regards,
Ann

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2

Hello @Anisha,

There are certain components that one should have as per the statutory requirements, and they are:

  • Basic
  • HRA
  • DA if any
  • Conveyance if any and

Rest goes to Special allowance, there can also be other components as Medical allowance - LTA - Bonus etc depending on the need.

I understand that covers it. If we have more we will hear more from our fellow members.

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3

Salary Structure for the point of Taxation, costing and in hand

Basic
HRA
Child Education allowance - Rs 200 per montn (Rs 100 exempt per chid per month upto 2 chidren)
Child Hostel Allowance - Rs 300 per month
Additional Allowance - (Special allowance are under the purview of PF)

Thanks
Amit

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4

Child Education & Children Hostel Allowance is not exempted under Income Tax since last year.

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5

Hi Balaji,

Under Old Tax Regime exemption was not withdrawn, if yes pls share the notification

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6

Hi ,

The simple salary components could be:

Basic
HRA
Food/Meal Coupons
Flexible Benefit Plan (FBP)

You can add many other components like Medical Reimbursement , special allowances etc but all these allowances are taxable so instead having so many components you can put all the amount under FBP.

Hope this information helps you.

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7

Hi,

I would suggest LTA too along with Basic, HRA and Meals coupon. Rest will go under FBP or Special Allowance (taxable) components. I would not recommend any other allowance/reimbursement as it is no longer available under IT rules.

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8

From a legal perspective, there are three major items, which are mandatory :

  1. Earnings
  2. Deductions
  3. Net Pay.

EARNINGS
i) Basic Salary : Comprises approximately 40%-50% of CTC.
ii) Dearness Allowance.
iii) House Rent Allowance (HRA): For Metro HRA allowance is 50% and for other regions 40%.
iv) Conveyance Allowance.
v) Leave Travel Allowance (LTA).
vi) Medical Allowance.
vii) Performance Bonus and Special Allowance.
viii) Other Allowances.

DEDUCTIONS
i) Provident Fund.
ii) Professional Tax.
iii) Tax Deducted at Source (TDS).
iv) Employee State Insurance (ESI) may not be applicable in 50k.
v) Labour Welfare Fund. (LWF) may not be applicable in 50k.

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9

Hi Community,

If you are looking for Total CTC structure with Salary less than 50K, then you should use this structure:-

Earnings:

  1. Basic + DA (Minimum to be as per Minimum Wages Act)
  2. HRA
  3. Special Allowance

Deductions:

  1. Provident Fund
  2. Profession Tax
  3. ESIC
  4. LWF
  5. TDS

Benefits:

  1. Employer PF
  2. Employer ESIC
  3. Gratuity
  4. Bonus

Upto 45K monthly salary, the TDS liability is almost Zero with few Investments (upto 40K) under section 80 C. So No need to add components like Meal Card, LTA upto 45K and would suggest to keep it simple structure.

Above 45K, you can add component LTA (which can be claimed twice in block of 4 years).

I normally keep only 3 components in Earnings for Salaries upto 50K.

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