Additional Payroll Components
Payslip
Section titled “Payslip”A salary slip is a document issued to the employees by employers. It contains detailed information of all components of the Salary
Form 16
Section titled “Form 16”Form 16 is a document issued by the employer with the information needed to file income tax returns. It is issued annually, after the end of the financial year, before the return-filing due date. Part A shows the TDS deducted from salary; Part B shows the tax computation.
Reimbursements
Section titled “Reimbursements”Reimbursement is the amount paid by the employer to an employee for the official expenses such as
- Official phone calls
- Cab expenses for travel for official purposes
- Meals during official Trips
- Hotel stay during official trips These are non-taxable as they are expenses incurred by employee on behalf of the company
Incentive and Bonus
Section titled “Incentive and Bonus”Incentives are paid when an employee meets specific goals. Bonuses are a yearly reward based on the employee’s salary; some bonuses are mandatory under the Bonus rules.
Ad-hoc pay
Section titled “Ad-hoc pay”Ad-hoc pay covers one-off or occasional payments such as a performance bonus, festival advance, or a salary or wage advance on the employee’s request.
Income tax
Section titled “Income tax”Income tax is deducted from an employee’s salary before payment. This deduction is known as TDS (Tax Deducted at Source) and is covered in detail under the income-tax section.
Employee Investment Declarations
Section titled “Employee Investment Declarations”At the beginning of the financial year, an investment declaration has to be made by the employee to the employer. Basis the declaration, Employer will deduct the tax accordingly from employee’s monthly salary.