Payroll Calculator

How Payroll calculations are done?

Payroll calculations usually constitute 4 main components – Basic pay, Allowances, Deductions, and IT Declarations.

Gross Pay

Gross Pay is the sum of Basic pay + Allowances.

Net Pay

Net Pay is the difference between Gross Pay – (Deductions + Total TDS). Total TDS is the sum of TDS, Surcharge, Health & Education Cess.

Basic Pay

Basic Pay is 50% of Gross salary (Gross * 0.5)

HRA

The amount received as the HRA from the employer. Actual rent paid less 10% of the basic salary and 50% of the basic salary if staying in a metro city and 40% in a non-metro city.

Provident Fund

PF deduction(Provident Fund) is  calculated on 12% of Basic + PF applicable allowances or 15,000, which ever is lower

Employee State Insurance

 ESI is calculated on  0.75% of – Gross Pay (Basic and LOP dependent allowances) or 21,000, whichever is lower

Rules for calculating payroll taxes

FY (2019 – 2020)

  • Income Tax formula for FY (2019 – 2020) = (Basic + Allowances – Deductions) * 12 – (IT Declarations + Standard deductions)
  • Deductions are the sum of PF, ESI, and PT etc.
  • TDS is calculated on (Basic + Allowances – Deductions) * 12 – (IT Declarations + Standard deduction)
  • Standard deduction (50,000)

FY (2020 – 2021)

  • Income Tax formula for FY (2020 – 2021) = (Basic + Allowances – Deductions (ESI)) * 12 – (IT Declarations)
  • Only ESI is considered as a deduction.
  • Exemptions for  FY (2020 -2021)
  1.  Chapter VI-A deduction (80C,80D, 80E and so on) (Except Section 80CCD(2) and 80JJA)
  2. Standard Deduction(50,000)
  3. Interest on housing loan (Section 24)
  4. House Rent Allowance
  5. Professional Tax
  6. Children Education Allowan

Payroll Calculator

Allowances

₹8,000.00
₹8,266.34

Deductions

₹783.65
₹2,400.00
₹157.5
₹200.00
₹36,458.85
Note: For more information on various Income Tax slabs for the above fiscal year, please click here.

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