Compensation includes both direct monetary benefits like salary as well as indirect non-monetary benefits like leave and insurance. Direct compensation refers to benefits like basic salary, bonuses, and medical reimbursements, while indirect compensation includes benefits like leave policies, insurance, and retirement plans. Payroll management involves calculating employee pay and making deductions for taxes, provident funds, and other amounts. Key labor laws regulate minimum wages, working hours, maternity benefits, bonuses, and retirement funds.