Your payslip is the monthly record of what you earned, what was deducted and why. Reading it properly helps you catch payroll errors, track your PF and plan your tax. You will also need payslips for loans, rental agreements, visa applications and background checks at your next job.
Below is an annotated sample payslip with real numbers, followed by an explanation of every line.
The sample payslip
Assumptions: A fresher in Pune (Maharashtra). Fixed monthly salary ₹44,000 (Basic ₹25,000, HRA ₹10,000, special allowance ₹9,000). September 2026 has 30 days; the employee took 1 day of unpaid leave, so 29 days are paid. The employer prorates every fixed component for LOP. New tax regime. PF is calculated on actual (prorated) Basic.
Header details: Employee name and ID, designation, department, PAN, UAN (PF number), bank account (last digits), pay period: September 2026, days in month: 30, paid days: 29, LOP days: 1, tax regime: New.
Earnings
| Component | Monthly rate | This month (29/30 days) | Year to date (Apr–Sep) |
|---|---|---|---|
| Basic | ₹25,000 | ₹24,167 | ₹1,49,167 |
| House Rent Allowance (HRA) | ₹10,000 | ₹9,667 | ₹59,667 |
| Special allowance | ₹9,000 | ₹8,700 | ₹53,700 |
| Arrears (increment backdated to August) | – | ₹2,000 | ₹2,000 |
| Internet reimbursement (against bills) | – | ₹1,000 | ₹6,000 |
| Gross earnings | ₹45,534 | ₹2,70,534 |
Deductions
| Component | This month | Year to date |
|---|---|---|
| Employee PF (12% of Basic) | ₹2,900 | ₹17,900 |
| Voluntary PF (VPF) | ₹1,000 | ₹6,000 |
| Professional tax (Maharashtra) | ₹200 | ₹1,200 |
| Income tax (TDS) | ₹0 | ₹0 |
| Total deductions | ₹4,100 | ₹25,100 |
Net pay this month: ₹45,534 − ₹4,100 = ₹41,434
Employer contributions (shown for information, not deducted from you)
| Component | This month |
|---|---|
| Employer PF – pension (EPS, 8.33% of PF wages) | ₹2,013 |
| Employer PF – provident fund (EPF, balance of 12%) | ₹887 |
How the numbers were worked out:
- LOP proration: ₹25,000 × 29 ÷ 30 = ₹24,167; ₹10,000 × 29 ÷ 30 = ₹9,667; ₹9,000 × 29 ÷ 30 = ₹8,700.
- Employee PF: 12% × ₹24,167 = ₹2,900.
- EPS: 8.33% × ₹24,167 = ₹2,013. EPF share: ₹2,900 − ₹2,013 = ₹887.
- YTD assumes April to August were full months with ₹1,000 reimbursement and ₹1,000 VPF each month.
- TDS is nil because projected annual taxable income is well under ₹12 lakh, where the new regime rebate makes tax zero.
Earnings, line by line
Basic salary
The base of your pay structure and fully taxable. PF and gratuity are calculated on Basic (plus DA, if any). Under the Labour Codes in force since 21 November 2025, if allowances exceed 50% of total pay, the excess is added back to "wages" for gratuity and similar calculations, so many employers now set Basic close to 50% of pay.
House Rent Allowance (HRA)
Fully taxable in the new regime. In the old regime, part of it can be exempt if you pay rent and submit rent receipts (and landlord's PAN if annual rent is above ₹1 lakh).
Special allowance
A balancing figure: whatever is left of fixed pay after Basic, HRA and other named allowances. Fully taxable.
Other allowances you may see
- LTA (Leave Travel Allowance): Exemption possible only in the old regime, with travel proofs.
- Meal or food card, telephone, fuel allowances: Tax treatment depends on the regime and how they are paid.
- Bonus / incentive / variable pay: Appears only in the month it is paid. Fully taxable.
Arrears
Money owed from earlier months, for example a backdated increment or a correction. Arrears are taxed in the year you receive them, so TDS may go up in the month they are paid.
Reimbursements
Repayment of expenses you incurred for work (internet, travel, client meals), usually against bills. They are not part of your salary rate. Whether they are tax-free depends on the nature of the expense and your employer's policy, so check with payroll.
Deductions, line by line
Loss of Pay (LOP)
Unpaid leave reduces your pay for those days. Some payslips show LOP as a separate deduction line; others (like the sample) reduce each earning in proportion. Employers differ on whether they divide by calendar days in the month or by a fixed 30 or 26 days. Check your company policy and confirm the LOP days match your leave record.
Employee PF
12% of PF wages (Basic + DA). The statutory wage ceiling rose from ₹15,000 to ₹25,000 per month from 17 September 2026. If your employer limits PF to the ceiling, the maximum is ₹3,000 a month.
Voluntary Provident Fund (VPF)
An optional extra contribution you can ask for, on top of the mandatory 12%. It earns the same EPF interest rate (8.25% for 2025-26). Interest earned on the part of your own contributions (EPF plus VPF) above ₹2.5 lakh in a year is taxable. VPF reduces monthly in-hand pay, so start it only if you will not need that cash.
Professional tax
A state tax with a constitutional cap of ₹2,500 a year. Maharashtra charges ₹200 a month and ₹300 in February for men earning above ₹10,000 a month. Women in Maharashtra earning up to ₹25,000 a month are exempt. Some states, including Delhi, Haryana, Uttar Pradesh and Rajasthan, have no professional tax.
Income tax (TDS)
Your employer projects your annual taxable income, works out the tax under the regime you chose, and spreads it over the remaining months. TDS can jump in later months if you get a raise, bonus or arrears, or if you submit old-regime investment proofs late.
Other deductions you may see
- ESI: Employees' State Insurance, only for lower wage levels.
- Labour Welfare Fund (LWF): A small state contribution, deducted once or twice a year in some states.
- Recoveries: Salary advance, notice-pay shortfall, company assets, canteen or transport charges.
Your monthly payslip checklist
- Paid days and LOP days match your attendance and leave record.
- Basic and allowances match your offer letter (after any increment).
- PF is 12% of PF wages, and the same amount shows in your EPFO passbook within a month or two (check it with your UAN).
- PT matches your work state's rate.
- TDS is reasonable for your income and regime. If it looks high, check your regime choice and declarations on the payroll portal.
- YTD totals add up. At the end of the year, your Form 16 (renumbered as Form 130 under the new Income-tax Rules) should match the sum of your payslips.
To see how your salary breakup turns into in-hand pay, use the In-Hand Salary Calculator. Our Methodology page explains how it works.
FAQ
Why is my net pay different this month even though my salary did not change?
Common reasons: LOP days, arrears, a bonus, a change in TDS after you updated your declarations, or the February professional tax adjustment.
Is the employer PF deducted from my salary?
No. The employer's share is paid on top of your salary (it is part of CTC). Only your own 12% (and any VPF) is deducted from your earnings.
How long should I keep my payslips?
Keep at least the last three months handy for loan and job applications, and keep all payslips for any year where you may need to reconcile tax. Storing PDFs in a cloud folder is enough.
Last reviewed: October 2026. This guide is for general information, not tax or financial advice. Rules change; confirm with your employer's payroll team or a chartered accountant before making decisions.