The document outlines the components and calculations involved in payroll management, detailing gross and net salary, cost to company (CTC), and various deductions such as employer and employee provident funds and professional tax. It explains key terms including employee state insurance (ESIC) and the implications of professional tax in India. Additionally, it presents a breakdown of sample salary figures to illustrate these concepts.

1. Payroll Management
Rutwik Nalawade
Post Graduate (Certificate) in Human Resource
Management, Manchester Metropolitan University, U.K.

2. What is Payroll?
• Payroll is the sum total of all
compensation a business must pay to its
employees for a set period of time or on
a given date
• The administration of the financial
record of employees' salaries, wages,
bonuses, net pay, and deductions.

3. Payroll includes
Deductions
 From Employers
 From Employees
CTC
Net Salary (In Hand)

4. Salary Annexure
• Gross Salary
• Basic
• HRA
• conveyance
• Medical
reimbursement
• Special Allowance
• Allowances
• Deductions
• Employer PF
• Employer ESIC
• Professional Tax
• Employee PF
• Employee ESIC
• Deductions II
• Professional Tax
• Employee PF
• Employee ESIC
• Net Salary

5. Calculations
• Earnings
• Gross Salary = Basic+ HRA+ conveyance+ Medical
reimbursement +Special Allowance +Allowances
• Employer PF
• Employer ESIC
• ADDING ABOVE= C.T.C. (Cost to Company)

6. Monthly Annual
Gross Salary 11,050 1,32,600
Earnings
Basic 3,315 39,780
HRA 1,326 15,912
conveyance 1,600 19,200
Medical reimbursement 1,250 15,000
Special Allowance 3,559 42,708
Gross Salary 11,050 1,32,600
Employer PF 436 5,231
Employer ESIC 525 6,299
-
CTC 12,011 1,44,130
-
Deductions
Professional Tax -
Employee PF 398 4,776
Employee ESIC 193 2,321
Total Deductions 591 7,097
Net Salary 10,459 1,25,504
PLI PLI

7. Features
C.T.C. (Cost to Company)
It is a term for the total salary package of an employee, it indicates the total
amount of expenses an employer (organization) spends on an employee during
one year.
E.S.I.C. (Employee State Insurance)
It is a self financing social security and health insurance scheme for Indian
workers.

8. Professional Tax (PT)
Professional Tax is a Tax which is levied by the State on the Income
earned by way of profession, trade, calling or employment. This
form of tax was first levied in India in the year 1949 and the power
to levy Professional Tax has been given to the States by way of
Clause (2) of Article 276 of the Constitution of India.
Net Salary
C.T.C.- Professional Tax -Employee
PF - Employee ESIC = NET
SALARY
Monthly
Salary
Amount payable in
Maharashtra
Less than
Rs. 7500
Nil
Rs. 7501 to
Rs. 10000
Rs. 175 pm
Rs. 10001 &
above
Rs. 200 pm except for the
month of Feb
Rs. 300 for the month of
Feb