A Glossary of HR Terminology

Glossary of Human Resources Management and Employee Benefit Terms

HR Wordbook > Passive Candidate 

Passive Candidate 

What is Pay Calculation?

Pay Calculation refers to the formula which calculates an employee’s gross to net income.

Formula for calculation?

  • Take-home Salary= Gross Salary – Income Tax – Employee’s PF contribution (PF) – Professional Tax.
  • Gross Salary = CTC – Employer’s PF contribution (EPF) – Gratuity.
  • Gratuity = (Basic salary + DA) × 15/26 × No. of years of service.
  • Taxable Income= Gross Salary – Employee’s PF Contribution (PF)/PPF investment – Tax-free Allowance – HRA – LTA – Medical Insurance – Tax Saving Investments – Other Deductions.