How to calculate payroll?

Payroll can be calculated normally for 30 or 31 days with 4 paid Sundays. It depends on the company policy what they want to consider.

As per Industrial Employment (Standing Orders) Act, 1946 (Ref. model Standing Order) the salary should be calculated on 30days for Monthly rated employee and 26days for daily rated employee, to maintain the constant PF deductions & LOP of an employee.

Salary Deductions:

There are 2 types of salary, Gross salary & Net salary. Gross means before any deductions .Net is what’s left after deductions.

Gross salary and basic salary are the same.

Net Salary=Gross- employee contribution to PF - other deductions (ESI+PT+HRA+TA+DA)

PF (Provident Fund): Employees' contribution 12% on Basic Salary & 13.61% from Employer

ESI (Employee State Insurance): Employees' contribution 1.75% on the gross salary & 4.75% from employer

PT (Professional Tax): It varies from state to state in India. The P.T is deducted on the gross salary

You can see professional tax calculation slab for Karnataka in the below table.

TA (Travelling Allowance): Includes   actual distance travelled on business, the distance does not exceed

8000 Km /tax year. The rate/Km may, at the option of the employee, be based on the maximum rate of R2.56 per Km.         

HRA (House Rent Allowance): 50% of the salary where the residential house is situated in Mumbai, Calcutta, Delhi or Chennai and 40% of the Salary where the house is situated at any other place for the relevant period.

DA(Dearness allowance): Government are pleased to sanction increase in the rates of Dearness Allowance payable to the State Government employees in the Revised pay Scales 2012 from the existing 9% to 15 % of Basic pay with effect from 1st July 2013.

Refer the below link for more details about DA.

https://centralgovernmentstaffnews.blogspot.in/2013/10/da-order-2013-karnataka-government-da.html

Here is excellent software which solves your big problem, named "HAPA”. It includes all the stuff required for calculating salary and leaves. HAPA updates the above mentioned contribution-percentage both for employee & employer, as and when the government rules & regulations are amended or revised.

 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 Government Act & Policies.

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

https://g7cr.com/products.php?id=70

In HAPA (Human Resources And People Appreciation): In HAPA software payroll can be easily calculated without manual intervention/calculation.

And is also reflected as a part of the salary slip which is automatically generated every month & is auto emailed to all the employees.