Skip to main content

Salary components

Add earnings and deductions such as Basic, HRA or a canteen deduction, choose how each is worked out, and set how it counts for PF, ESI, PT and tax.

Updated 30 Oct 2026 · 2 min read · For: Owners, Admins and managers

On this page
  1. See your components
  2. Add a component
  3. How it counts

Components are the building blocks of a salary. Each one is an earning, a deduction, an employer contribution or a reimbursement.

See your components

Go to Salary. The first page, Salary components, has tabs: All, Earnings, Deductions and Made by payroll. Components made by payroll, such as PF, ESI and Professional Tax, are marked System. Payroll works them out itself.

Add a component

  1. Below the list, find the Add a component form.
  2. Choose the Type: Earning, Deduction, Employer contribution or Reimbursement.
  3. For an earning, choose the Earning type, for example Basic, House rent allowance, Dearness allowance or Special allowance.
  4. Enter the Name, the Code in capital letters (used in formulas) and the Name on payslip.
  5. Choose the Calculation. See the table below.
  6. Set how it counts for statutory items and tax. See the next section.
  7. Select Save.

You need the Set up payroll permission.

CalculationHow the amount is found
Fixed amountThe amount set in the salary
Percent ofA share of other components or of gross. Enter 40 for 40%
FormulaBuilt from component codes with + − × ÷, min and max
Rest of grossWhatever is left of gross after the other lines

Some components made by payroll show From attendance, such as overtime and fines, or Entered in payroll. You cannot choose these two for a component you add.

How it counts

SettingChoices
Counts for PFAlways, Only below the PF ceiling or No
Counts for ESIYes or No
Counts for Professional TaxYes or No
Counts for LWFYes or No
Counts for gratuityYes or No
Counts for statutory bonusYes or No
Counts for the overtime rateYes or No
TaxableYes or No
Wage class under the labour codesWages (basic, DA, retaining allowance), Allowance outside wages (50% rule) or Not remuneration
Reduce for unpaid daysWhether loss-of-pay days reduce it
DeductedDeductions only: Before income tax or After income tax

Select Edit to change a component.

Still need help?

Write to us with your business name and what you were trying to do. We answer by email.

narayanaglobalventures@gmail.com Contact page