Indian HR & Statutory Payroll Glossary (A–Z)
Clear, definitive explanations of complex Indian labour laws, salary structure components, tax deduction formulas, and compliance protocols.
Cost to Company (CTC)
The total expenditure an employer incurs on an employee annually, combining Gross Pay, employer statutory EPF/ESI contributions, gratuity provisions, and benefits.
Electronic Challan cum Return (ECR)
The monthly digital return file uploaded to the EPFO Unified Portal detailing member UANs, contributory wages, EPF, EPS, and EDLI remittances.
Employees' State Insurance (ESI)
A self-financing social security scheme under the ESI Act 1948 providing healthcare and cash benefits for employees earning gross wages up to ₹21,000/month.
Gratuity (Payment of Gratuity Act 1972)
A statutory retirement benefit payable to employees completing 5 or more continuous years of service, calculated as (15 × Last Basic × Tenure) / 26.
House Rent Allowance (HRA)
A salary component paid to assist employees with rental housing expenses, partially exempt from income tax under Section 10(13A) of the Income Tax Act.
Loss of Pay (LOP)
A payroll deduction applied when an employee exhausts available paid leave balances or takes unapproved absences, calculated against monthly working days.
Professional Tax (PT)
A state-level direct tax levied by state governments on salaried individuals, capped constitutionally at ₹2,500 per annum under Article 276(2).
Sandwich Rule
A leave management policy where intervening weekly off days or public holidays are counted as paid or unpaid leave when sandwiched between absences.
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