Payroll

HR → Payroll turns each month's salary structures, attendance and leave into payslips. This is the flagship page of the module: it runs August 2026 payroll for R. Mehta end to end, deriving every figure — PF, ESI, Professional Tax, TDS and the LOP deduction — and lands on his net pay of ₹27,000.

Run monthly payroll

Payroll is processed in monthly cycles (payroll periods). Nothing is typed at pay time — the run gathers what the other pages already recorded.

1. Open the payroll period for the month — here August 2026.
2. Raya pulls each active employee's salary structure (Employees), plus attendance/overtime (Attendance) and approved leave (Leave) for the period.
3. Review the computed earnings and deductions for each employee.
4. Generate payslips for the period.

The statutory rates you configure

PF, ESI, Professional Tax and TDS are set up once as deduction components in the salary structure; the run applies them each month. These are the current Indian rates you'll configure them to.

Item	Employee	Employer	Computed on	Key rule
Provident Fund (EPF)	12%	12%	Basic (+ DA)	Statutory wage ceiling ₹15,000 basic
ESI	0.75%	3.25%	Gross wages	Only if gross ≤ ₹21,000/month
Professional Tax	State slab	—	Gross	State tax, capped at ₹2,500/year
TDS (income tax)	Per slab	—	Projected annual salary	New or old regime

:::info Statutory filing is on the roadmap Raya computes these amounts on the payslip, but automated filing — PF/ESI returns, PT challans, TDS challans and Form 24Q — is planned, not live. Treat the figures below as what to remit through the government portals yourself. :::

Provident Fund (PF)

Employee PF is 12% of Basic. For R. Mehta: 12% × ₹15,000 = ₹1,800.

The employer also contributes 12% of basic (₹1,800). Of the employer's share, 8.33% (up to the ₹15,000 wage) goes to the Pension (EPS) portion and the rest to EPF. R. Mehta's basic is exactly at the ₹15,000 ceiling, which keeps the maths clean.

ESI

ESI is 0.75% employee + 3.25% employer of gross wages, but it only covers employees earning gross ₹21,000/month or less.

:::note ESI does not apply to R. Mehta His gross is ₹30,000, above the ₹21,000 ceiling — so ESI is Not Applicable and there is no ESI line on his payslip. This is the correct outcome, not an omission. :::

Worked ESI example (for an in‑ceiling colleague). Take S. Kumar, a helper on ₹18,000 gross — within the ceiling, so ESI applies:

ESI contribution	Rate	Amount
Employee	0.75% × 18,000	₹135
Employer	3.25% × 18,000	₹585

ESI is computed on gross (not just basic). Once an employee is in ESI at the start of a contribution period (Apr–Sep or Oct–Mar), they stay in for the whole period even if a mid‑period raise lifts them past ₹21,000.

Professional Tax (PT)

PT is a state tax, so the slab depends on the employee's work‑location state. R. Mehta works in Pune (Maharashtra); the Maharashtra slab is:

Monthly gross	PT / month
Up to ₹7,500	Nil
₹7,501 – ₹10,000	₹175
Above ₹10,000	₹200 (₹300 in February)

His gross ₹30,000 is above ₹10,000 → ₹200 for August. (States such as Delhi, Haryana and UP levy no PT at all; Karnataka, West Bengal and Tamil Nadu use their own slabs.)

TDS

TDS spreads the year's estimated income tax across 12 months. For R. Mehta:

• Projected annual gross: ₹30,000 × 12 = ₹3,60,000.
• Under the new regime, standard deduction ₹75,000 → taxable ≈ ₹2,85,000.
• That's below the basic exemption, so annual tax = ₹0 → TDS = ₹0.

So R. Mehta has no TDS. For a higher earner it would be the annual tax ÷ 12, adjusted as the year progresses; you configure TDS as a deduction component and enter the monthly amount.

R. Mehta's inputs for August

Input	Value	Source
Salary structure	₹30,000 (Basic 15,000 / HRA 6,000 / Allow. 9,000)	Employees
Overtime	0 hours	Attendance
Approved paid leave	2 days casual (paid)	Leave
LOP days	1 (6 Aug, uncovered absence)	Attendance

Loss of Pay (LOP)

LOP prices each unpaid day and deducts it. Raya's default basis is a fixed 30‑day month (configurable to calendar days or working days):

Per‑day pay = Gross ÷ 30 = 30,000 ÷ 30 = ₹1,000
LOP deduction = 1 day × ₹1,000 = ₹1,000

The 2 casual days are approved and paid, so they do not appear here — only the uncovered day does.

The payslip — August 2026

Earnings

Earning	Amount (₹)
Basic	15,000
HRA	6,000
Special / Other Allowances	9,000
Overtime	0
Gross earnings	30,000

Deductions

Deduction	Basis	Amount (₹)
Loss of Pay (1 day)	30,000 ÷ 30	1,000
Provident Fund (employee)	12% × 15,000	1,800
ESI (employee)	Gross > ₹21,000 → N/A	0
Professional Tax	Maharashtra slab	200
TDS	Below taxable threshold	0
Total deductions		3,000

Net pay

Net pay = Gross earnings − Total deductions
        = 30,000 − 3,000
        = ₹27,000

R. Mehta's net pay for August 2026 is ₹27,000. Click Generate payslip and it becomes a downloadable PDF he can also see in the self‑service portal.

Cost centre allocation

Each employee's cost is tagged to a cost centre — their department — so payroll lands against the right part of the business. R. Mehta's cost is allocated to Production. His full cost to the company for August is:

Component	Amount (₹)
Gross earned (after LOP)	29,000
Employer PF (12% of basic)	1,800
Cost to company — Production	30,800

:::info Posting payroll to Finance is on the roadmap Automatic posting of the payroll journal into Finance is planned. Today you record it once a month as a manual journal voucher, tagged to the Production cost centre:

Dr  Salaries & Wages — Production ............. 29,000
Dr  Employer PF Contribution — Production ...... 1,800
    Cr  EPF Payable (1,800 employee + 1,800 employer) . 3,600
    Cr  Professional Tax Payable ..................... 200
    Cr  Net Salary Payable (R. Mehta) ............ 27,000
                                        ------------------
                                        30,800   30,800  ✓ balanced

See Vouchers for how to post a journal. :::

What a payslip shows, in general

Earnings	Deductions
Basic	Provident Fund (PF)
HRA (House Rent Allowance)	ESI (if within the ₹21,000 ceiling)
DA (Dearness Allowance)	Professional Tax (PT)
Other allowances	TDS
Overtime	Loss of Pay (LOP)

• LOP is calculated automatically from unauthorised absence and unpaid leave.
• Overtime hours from attendance are added to earnings.
• Statutory items (PF, ESI, PT, TDS) are configured as deduction components.

:::info Bank‑file export is on the roadmap Raya doesn't yet produce a bank upload file for bulk disbursement. Use the net‑pay figures from the payslips to pay salaries from your bank. :::

Related

• Employees — the salary structure that seeds the run.
• Attendance — overtime and LOP inputs.
• Leave — approved leave that keeps pay whole.
• Vouchers — post the payroll journal in Finance.
• Settings — payroll roles and permissions.