Glossary
| Payroll | Payroll is a term that is used to describe the process of calculating and disbursing the salary that is to be paid to an employee. |
| Payroll processing | Payroll processing is the set of activities to be done in computing and disbursing salaries for an employee. |
| Compensation structure | The various salary heads (Basic, DA, HRA) under which salary is paid to an employee |
| Gross income, gross, income | "Income" refers to the total of all income components (heads) that are paid to the employee. For example, if the income components are Basic, HRA and Conveyance, then Income = Basic + HRA +Conveyance. Income also refers to the total sum of money that the employee is supposed to get. Income is also called as "Gross". |
| Deductions | An employee normally does not get all the money that is part of their income. Out of the gross income, some portion is deducted towards various items like PF, ESI, income tax, etc. The sum of all the amounts deducted from an employee's salary are called as "Deductions" |
| Net Pay | The actual salary an employee received for a month is called as "Net Pay" or "Net". Net Pay = Income - Deductions |
| CTC | CTC stand for "Cost To Company". This is the sum total of all payouts done for an employee. This includes Income, Reimbursements and any other payout that the company gives to the employee. |
| FBP | FBP stands for Flexible Benefit Plan. For more details on FBP refer to this link. |
| PF | Provident Fund |
| ESI | Employee State Insurance |
| PT | Profession Tax |
| IT | Income Tax |
| TDS | Tax deducted at source |
| LOP, LWP | LOP stand for "Loss of Pay". In some organizations, this is also called "LWP" or "Leave without Pay". |
| Prorating, pro-rata prorate | Pro rata is an adverb or adjective, meaning "in proportion". Prorating refers to calculating a salary head based on the number of days actually worked by an employee. |
| Arrears | An employer may revise the salary of employee from retrospective effect. Or, a salary revision may happen but increments are paid out at a later date. In both these cases, since the salary for previous periods is already disbursed, the differential amount ("arrears") is paid out in a subsequent period. In such a situation, to avoid confusion, the arrears amount is computed and mentioned separately in the payslips. |
| Pay-slip, salary slip | Pay slip is a slip of paper distributed to employees, every month, that gives the breakup of income, deductions, loss of pay, leave days, etc. A pay-slip helps an employee to understand what salary has been paid out to her and how. These days, pay-slips can also be emailed to employees or can be published on the website. |
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This page (revision-) was last changed on 28-Mar-2009 09:18 by Sayeed Anjum