Salary slip components explained
Updated 11 October 2026
A salary slip has two halves: earnings, which add up to your gross pay, and deductions, which are subtracted to give your net or in-hand pay. Basic pay drives most of the other lines, because DA, HRA, PF and NPS are all calculated as percentages of it. Here is what each common line means for private-sector and central government employees.
Earnings
| Component | What it is | Tax |
|---|---|---|
| Basic pay | The fixed core of your salary. PF, gratuity and (for government staff) DA and HRA are based on it. | Fully taxable |
| Dearness allowance (DA) | A percentage of basic pay to offset inflation. Common in government jobs; 60% for central government staff from 1 January 2026. | Fully taxable |
| House rent allowance (HRA) | Help with rent. In government jobs it is 30%, 20% or 10% of basic by city class. | Partly exempt in the old regime if you pay rent |
| Special allowance | A balancing figure in private salaries, often what is left of CTC after other parts. | Fully taxable |
| Transport or conveyance allowance | For commuting. Central government staff get a fixed amount by level and city, plus DA on it. | Taxable (exempt only for some disabled employees) |
| Leave travel allowance (LTA) | Reimbursement for domestic travel on leave. | Exempt for actual travel in the old regime, within the rules |
| Bonus, incentives, overtime | Variable payments. | Fully taxable |
For how HRA exemption works, see HRA exemption and the HRA calculator.
Deductions
| Component | What it is |
|---|---|
| EPF (employee share) | 12% of basic + DA (or of the wage ceiling, ₹25,000 from 17 September 2026) into your provident fund |
| VPF | Voluntary extra PF, if you choose it |
| NPS (employee share) | 10% of basic + DA for central government employees in NPS or UPS |
| GPF | General Provident Fund savings for old-pension government employees |
| Professional tax | A state tax on employment, up to ₹2,500 a year |
| ESI | 0.75% of gross for employees earning up to ₹21,000 a month |
| Income tax (TDS) | Tax deducted at source on your projected annual income |
| CGEGIS | Central government group insurance: ₹120 (Group A), ₹60 (Group B) or ₹30 (Group C) a month |
| CGHS | Central government health scheme: ₹250 to ₹1,000 a month by level |
| Licence fee | Rent for government accommodation; HRA is not paid if you live in it |
Worked example: a Level 7 central government payslip
See the same figures for any level in the 7th CPC salary calculator or on the Level 7 salary page.
Lines that show the employer's share
Some payslips also show the employer's PF or NPS contribution. This is not deducted from your pay; it is paid by the employer on top of gross pay and forms part of your CTC. For central government NPS members, the government's 14% is added to salary income in Form 16, and the same amount is allowed as a deduction under both tax regimes. See CTC vs in-hand salary.
How to check your payslip
- Check that basic pay matches your appointment letter or pay matrix cell, and that DA uses the current rate.
- Check that PF or NPS is 12% or 10% of the right base, and that TDS matches the regime you chose.
- Match the yearly totals with Form 16 and your Form 26AS and AIS before filing your return.
- Keep payslips for at least the last few months; banks and landlords often ask for them.
- Look for one-off lines such as arrears, bonus or leave encashment. They raise TDS in that month, so a smaller net figure is not always an error.