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Replied to "Salary Slip" in Best HR Practices!!
Salary Slips – good to know
Right to a pay slip
All employees are entitled to an individual, detailed written pay slip – at or before the time they are paid. The pay slip doesn’t have to be on paper as a hard copy – it can also be sent to an employee by email. The right to a pay slip applies to casual staff as well as employees. It doesn't apply to independent contractors or people working freelance.
HAPA (Human resource And People Appreciation), a HRMS application used by Small and medium scale companies across the globe, auto generates the pay slips, the moment the salaries are processed using its Payroll Management feature.
Also, the salary slips are auto emailed to the respective employees.
For details about HAPA click the link below:
What information a pay slip must contain?
A pay slip must show:
• Gross pay – full pay before any tax or National Insurance has been deducted.

• The amounts of any deductions which change from payday to payday (variable deductions). For example, tax and National Insurance, with a small description of the same.

• The total amount of any fixed deductions – these are the deductions which don't change from payday to payday (i.e. are non-variable), for example union dues. An employer does not have to give details of what these deductions are for, as long as they give a separate statement with these details on, at least once a year.

• The total amount of take-home pay after deductions.

• The amount and method for any part payment of wage (for example separate figures of a cash payment and the balance credited to a bank account).

A payslip might contain some ‘non-mandatory’ additional information, such as:
• Tax code
• Pay rate (either annual or Monthly), and
• Breakdown of additional payments like overtime, tips or bonuses, which must in any case be included in your gross pay figure.

General breakdown of a pay slip
1. Personal information
The Name & PF No., Pay Days, Present Days, DOJ, Designation, A/c No., PAN No., Mode of Pay will be shown.

2. Payroll number
Some companies use payroll numbers to identify individuals on the payroll.

3. The date
The date, the salary should be credited to your bank account.

4. The tax period
The number here represents the tax period for that pay slip, for example if you are paid monthly, 01 = April and 12 = March.

5. Tax code
Tax code will be sent to you by HM Revenue & Customs (HMRC). It is the code that tells your employer how much tax-free pay you should get before deducting tax from the rest. If the code is wrong, you could end up paying too much or too little tax, so you should check this against your notification of your tax code.

6. Payments, wages, bonuses, commission
This will show how much the employee has earned in wages before any deductions are made. It might also show how the pay is calculated, for example your daily rate and the number of days worked. It will also show any extra payments the employee has earned on top of your basic pay like bonuses, commission or overtime.

7. Expenses
The employer may pay any expenses owing to the company via the payroll. Some employers will itemize each expense payment separately on the pay slip while others add the total amount together and show it as a taxable or non-taxable amount.

8. Deductions – tax and National Insurance
The pay slip will show the amount of variable deductions, like tax and National Insurance, and any contributions you’re making to a workplace pension.

In HAPA (Human Resource And People Appreciation) the pay slips are automatically generated and mailed to each and every employee of the company. And the pay slip shows the deduction of the salary and the purpose for the deduction of the salary. Click for more:
What do you mean by minimum wages?
A minimum wages is the lowest hourly, daily or monthly remuneration that employers may legally pay to workers. Minimum Wages have been provided by the Labor Departments of respective states.
HAPA (Human Resources and People Appreciation) which is a well-known low cost HRMS solution in the market, made specifically, keeping the needs of small and medium businesses in mind, takes care of all procedures to calculate salary along with PF, TDS, ESI, Gratuity etc. Bonus, Deductions, Incentives are all a part of the salary components. The same is also reflected in the salary-slips, which are auto generated and auto emailed to all the employees.
HAPA also updates the minimum wages mentioned above, in the application so that the HR or the Finance manager of the company is aware of the govt. policies/rules/regulations. HAPA does not forces a company to follow the rules, however makes sure that the company is notified about the same. The minimum wages of different set of employees are updated in HAPA as and when the government rules & regulations are amended or revised. To know more about HAPA, click here:

Who all are involved in setting minimum wages?
Decision jointly made by the Government, employer and trade union representatives
Government Acts On Minimum Wages:
There is separate minimum wage legislation in India. Minimum Wages Act, 1948 is an Act to provide for fixing minimum rates of wages in certain employments and it extends to the whole of India.
HAPA, complies by each state act in India and throws notifications to HR’s and Finance managers regarding the minimum wage of all the employees as and when required. This helps the HR/Finance to be aware of the govt. rules and acts.
The Karnataka government has decided to revise minimum wages in 24 industrial sectors. The revised wages which came into effect from September 21, 2013 would be Rs 5044 (for A grade cities), Rs 4264 (for B grade cities) and Rs 3484 (C grade cities) on monthly basis. This would translate into Rs.194 daily wages for A grade cities, Rs.164 for B grade cities and 134 for c grade cities.
Rs.5044 For A grade cities Rs.194
Rs.4264 For B grade cities Rs.164
Rs 3484 For C grade cities Rs.134
The government also proposed to revise pay scales of city corporations. For Mahanagar Palike it would be Rs 5,980, City Corporation Rs 5720 and Rs 5200 for local bodies on monthly basis
For more details on Minimum Wages in Karnataka w.e.f. April 1, 2013 to March 31, 2014, click the link below.
Benefits of minimum wages:
Helps Families: With minimum wage, the level of poverty is reduced.
Reduces Tax Burden: With minimum wage, the need for public assistance is lowered and this reduces the tax burden on the community and the state.
Employment Incentive: A minimum wage gives an unemployed person incentive to take a job. An unemployed person can compare the money he gets from public assistance and compare it to the minimum wage to determine the financial incentive to taking a job.
Business Budgets: Without a minimum wage, it can be difficult for small businesses to budget their money. With a minimum wage in place, a small business owner knows what he will be expected to pay per hour and he can create new jobs with his company based on this budgeting information.
Common Reference: The minimum wage makes the hiring process easier for young or unskilled workers and employers. The worker knows upfront what kind of wage she can expect, and the employer does not have to go through the process of negotiating a wage with a new employee.
HAPA (Human resources And People Appreciation) automates complete HR activities end-to-end in an organization. It has features like, employee record management, payroll management, leave management, workstation management, attendance management etc.
To know more about the HRMS Software Solution HAPA click on the link given below:
Gratuity is the payment made by the employer to his ex- employee for his past services. Gratuity is similar to a gift given by employer for appreciation of past services of his employee. The technical definition of gratuity given by ICAI is

Who is eligible for Gratuity?
 As per Payment of Gratuity Act 1972, any employee who has been in continuous service for 5 years is eligible for gratuity.
 During the above mentioned 5 years, employee is eligible for casual leave and sick leave without affecting his eligibility.
 In case of death of an employee, the above condition 5 Years of continuous service is not applicable i.e. even if an employee dies
After 2 years of service, he/she is still eligible for gratuity.

The eligibility of an employee is predefined in HAPA (Human resources And People Appreciation). Gratuity in HAPA is auto calculated for the employees. A task is auto generated for the HR to process the same.
How is gratuity calculated?
a) Gratuity calculation formula for employees receiving monthly salary

When calculating completed years of service, if an employee worked for more than 6 months, it will be considered as full year.
Example: Employee worked for 14 years and 7 month, then completed years of service = 15 years
Example: Employee worked for 14 years and 5 months, then completed years of service = 14 years
Example: Employee worked for 14 years and 6 months, then completed years of service = 14 years
Last salary drawn = basic salary + dearness allowance

In HAPA, the HR need not to calculate the gratuity manually for the employees. It gets auto calculated for all the eligible employees and also a task is thrown to the HR to process the same.

b) Gratuity calculation formula for piece rated employees
(Workers receiving payment on the basis of the number of pieces produced)
Gratuity shall be calculated as follows:
Last drawn wages *15/26 *completed years of service
Completed years of service are calculated in the same way as for employees receiving monthly salary.
Last drawn wages are computed by taking average of the total wages received by him for a period of three months immediately preceding the termination of his employment. While computing daily wages, the total wages of last three months is to be divided by number of days the employee actually worked, and not by the number of days or the number of working days in the said period of three months.
Example: A piece rated employee received Rs.30,000 during the last three months before his retirement. The factory had 60 working days in the last three months but the employee came to work for only 30 days.
Last salary drawn will be calculated as rupees 30,000÷30= Rs.1000

In HAPA (Human resource And People Appreciation), which is a complete HRMS application used by small and medium scale companies across the globe, gratuity is automatically calculated. HAPA automatically generates a task for the HR to remind/process gratuity of an employee on the completion of 5 years in the organization. At the same time, an email is sent automatically by HAPA, to congratulate the employee for the completion of 5 years. This also maintains a “personal touch” at the workplace and delights the employees. The “personal touch” in a business is very important and essential for employee satisfaction & retention.
For more details about HAPA click the link below:

Maximum Amount of Gratuity
The amount of gratuity cannot exceed Rs 10, 00,000 (10 lacs). Even if it exceeds, maximum amount payable by employer shall be Rs 10, 00,000.

When is Gratuity Payable?
Gratuity is Payable on employee’s Superannuation, Retirement or death (whichever is earlier).
In case of death of an employee, gratuity is paid to their legal heirs (nominees)
Every employee who has completed one year of service is required to make a nomination. This nomination should be made within 30 days of completion of first year of service.
This nomination should be made in the favor of a family member. A nomination made in the name of any other person is void. However, “if the employer does not have any family that is when he can make a nomination in favor of any person”. But the employee will be required to make a fresh nomination within 90 days of acquiring a family.

Payment of Gratuity
After Gratuity becomes Payable , employer is required to pay it within 30 days as per the provisions of Payment of Gratuity Act 1972 .If the employer fails to pay gratuity within 30 days then, he shall be liable to pay simple interest at the rate notified by central government.

With HAPA (Human resources And People Appreciation), the HR does not have to do any manual calculations as mentioned above already. The payroll management feature of HAPA, which calculates the salaries of employees (including PF, TDS, ESI, Mediclaim etc.) also calculates Gratuity. HAPA ensures a timely and error free calculation without an HR keeping an eye on the calendar for reminders. HAPA does it all for you. Click the link for more:
Replied to "ESI & PF PROCEDURES" in Human Resource Management!!
How to calculate employees provident fund (epf)? What is PF?
PF is Provident Fund is a part of your salary, which is deducted every month and deposited on your behalf. If you work in a private firm then the company pays the same amount as it is deducted from your account and when you leave the firm you can apply and withdraw the amount saved. It's actually your personal saving of your earnings. If you are in government service then you will get the lump sum when you retire
As per new rules, it is calculated along with other allowance like conveyance and medical which are common to all the employees.

HAPA (Human Resources and People Appreciation) which is a well-known low cost HRMS solution in the market, made specifically, keeping the needs of small and medium businesses in mind, takes care of all the limitations and regulations, and complies with the Employees' Provident Fund Act.

How to Calculate PF?

First you have to calculate the Basic Salary which is approximately 50% of the CTC.
12% of Employee Share towards PF
8.33% of Employee Share as Family Pension Funds
3.67% of Employer Share for EPF

The various benefits of Employee Provident Fund
Employee Provident Fund is a very important tool of retirement planning. The compounded tax free interest and the maturity ensures a good growth of your money

Here are some of these which every enrolled person should know-
1 .PF Entitles for Pension Too: There are two elements in EPF- Provident Fund and EPS or Employee Pension Scheme introduced in 1995.
2. Insurance Benefit: As per EDLI (Employee Deposit Linked Insurance) scheme, in any organization where group insurance scheme is not available to the employees.
3. Special Occasions- EPF at help : There are special occasions in your family or some emergency arises. In case of need of funds and no recourse, EPF comes handy as it gives option to withdraw from the corpus but within a certain limit and by meeting some specified conditions.
4. Goals- Marriage, Education need for self, child or any sibling- In case you have to arrange funds for any of the above need then from your EPF corpus you can withdraw up to 50% of your contribution
5. Your Dream House - You can withdraw from your EPF account for house construction, repair or maintenance or for housing loan repayment. For all of these benefits, there are conditions specified by the organization
6. Medical Emergency - EPF gives benefit for major surgical operations in a hospital or by those suffering from TB, leprosy, paralysis, cancer, mental derangement or heart ailment.

In HAPA (Human Resources and People Appreciation) an HRMS Software/ Solution. The PF gets calculated easily and automatically along with the ESI and TDs Ect.. without any manual intervention/calculation and is also reflected as a part of the salary slips which are automatically generated every month and an auto-emailed to all the employees.

To know more about the HRMS Software Solution HAPA (Human resources And People Appreciation) click on the link given below:
Replied to "ESI & PF PROCEDURES" in Human Resource Management!!


What is ESI?

E.S.I. is Employee State Insurance and is used for the benefit of the employee. If the gross salary of the
employee is <= 10K, then it is applicable on the employee where, 1.75% of the gross salary is
deducted/contributed towards ESI. Employees can avail medical benefits through ESI.

HAPA (Human Resources and People Appreciation) which is a well-known low cost HRMS solution in the
market, made specifically, keeping the needs of small and medium businesses in mind, takes care of all the
limitations and regulations, and complies with the Employees' State Insurance Act


E.S.I. Scheme being contributory in nature, all the employees in the factories or establishments to which the
Act applies shall be insured in a manner provided by the Act. The contribution payable to the Corporation in
respect of an employee shall comprise of employer's contribution and employee's contribution at a specified
rate. The rates are revised from time to time and are also simultaneously updated in HAPA .
Currently, the employee's contribution rate (w.e.f. 1.1.97) is 1.75% of the wages and that of employer's is
4.75% of the wages paid/payable in respect of the employees in every wage period. Employees in receipt of a
daily average wage upto Rs.100/- are exempted from payment of contribution. Employers will however
contribute their own share in respect of these employees.

These calculations are timely & automatically done by the HRMS solution HAPA (Human Resources and
People Appreciation) for all the employees of an organization, with a detailed report of the salary breakups to
the HR’s & the employees.

Contribution Period and Benefit Period

There are two contribution periods each of six months duration and two corresponding benefit periods also of
six months duration as under.

Contribution Period Cash Benefit Period
1st April to 30th Sept. 1st Jan of the following year to 30th June
1st Oct to 31st March of the year 1st July to 31st December.

For Example: If the CTC of an employee is Rs.8, 000/-. Then the calculations will be as follows:

8000 * 4.75% = Rs. 380/-
8000 * 1.75% = Rs. 140/-

HAPA updates the above mentioned contribution-percentage both for employee & employer, as and when the
government rules & regulations are amended or revised.

Different types of ESI Forms like Declaration form, Employer’s Registration Form etc. can be found by clicking
on the link below:
The above link can also be used to download the forms.

Benefits of ESI:

The section 46 of the Act envisages following social security benefits:-
1. Medical Benefit
2. Sickness Benefit (SB)
3. Maternity Benefit (MB)
4. Disablement Benefit
Dependents’ Benefit (DB) 5.
6. Other Benefits
7. Incentive to employers in the Private Sector for providing regular employment to the persons with
8. Benefits & Contributory Conditions:

For more details about ESI benefits and about the government acts, rules & regulations related to the same,
you may visit the link below:

The ESI is a part of the HAPA Payroll Management where the salary of all the employees gets calculated.

In the HRMS Software Solution, HAPA (Human Resources And People Appreciation) ESI gets calculated easily
and automatically along with the PF, TDS etc. without any manual intervention/calculation and is also

reflected as a part of the salary slips which are automatically generated every month and are auto-emailed to
all the employees.

To know more about the HRMS Software Solution HAPA (Human resources And People Appreciation) click on
the link given below:

ESI is deducted from an employee’s salary for the bene fit of the employee, which is beneficial during medical

Thank you for your Valuable Time.

G7cr Tech

G7cr Picture

Bangalore, KA

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