Earn More · 7 min read
How to read your salary slip in India: every line explained
Basic, HRA, special allowance, PF, professional tax and TDS: what each line on an Indian payslip means, and the five things worth checking every month.
Krish Dalal
Founder and editor, PaisaExpert. Master's in Business Management, SP Jain School of Global Management, London. · Last updated 2026-09-26
Your offer letter talks in CTC. Your bank account talks in net pay. The salary slip is the only document that shows the bridge between the two, line by line. Most people glance at the last number and close the PDF. It is worth two minutes a month, because payslip errors are common and they compound: a PF contribution that never reaches your account, or TDS deducted under the wrong regime, costs real money that is tedious to recover later.
The earnings side of a payslip
| Line | What it is | Is it taxed? |
|---|---|---|
| Basic pay | The core of your salary. PF and gratuity are calculated on it | Fully taxable |
| HRA | House rent allowance | Partly exempt under the old regime if you pay rent. Fully taxable under the new regime |
| Special allowance | The balancing figure that makes your CTC add up | Fully taxable |
| LTA | Leave travel allowance, often paid only when you claim it | Exempt for eligible travel under the old regime, within limits |
| Bonus or variable pay | Performance or statutory bonus, often paid quarterly or yearly | Fully taxable in the month it is paid |
Since the new labour codes took effect in November 2025, the parts of your pay that count as wages, broadly basic pay and dearness allowance, must make up at least half your total pay when PF, gratuity and other benefits are calculated. Allowances above that half are counted back in. If your basic was kept very low, your employer may have restructured your salary, which can trim take-home pay slightly while raising your PF and gratuity. That money is moved into your future, not lost.
The deductions side
- Employee PF. Twelve percent of basic pay goes into your EPF account, and your employer adds a matching amount that does not appear in your gross pay. Under the EPF Scheme 2026 the mandatory base is capped, so some payslips show a flat ₹1,800. Employers who contribute on your full basic save more for you.
- Professional tax. A state tax on employment, capped by the Constitution at ₹2,500 a year. Some states levy it and some do not. Where it applies it is often around ₹200 a month.
- TDS. Income tax your employer deducts every month from your projected annual income and the regime you chose. If you declared nothing, employers apply the new regime, which is the default.
- ESI, only if your gross pay is up to ₹21,000 a month. You pay 0.75 percent and your employer 3.25 percent, which buys medical cover through ESIC.
- Anything else, such as group health top-ups, canteen charges or a salary advance being recovered. Each one should have been agreed with you, so ask about any line you do not recognise.
A worked example
Take a monthly gross of ₹50,000, split as basic ₹25,000, HRA ₹10,000 and special allowance ₹15,000.
| Line | Monthly |
|---|---|
| Gross earnings | ₹50,000 |
| Employee PF, 12% of basic | minus ₹3,000 (or ₹1,800 on the capped base) |
| Professional tax, where the state levies it | minus ₹200 |
| TDS under the new regime | ₹0 |
| Net pay | ₹46,800 |
Why is TDS zero? An annual gross of ₹6 lakh, minus the ₹75,000 standard deduction, leaves ₹5.25 lakh of taxable income, and under the new regime a resident individual with taxable income up to ₹12 lakh owes no tax after the rebate. On a much larger salary, TDS becomes the biggest line on the slip, which is why the regime you pick matters. Old vs new tax regime helps you choose.
Five things to check every month
- Your name, PAN and UAN are correct. A PAN typo sends your TDS credit to nobody.
- PF reached your account. Log in to the EPFO member passbook with your UAN and confirm the month's contribution landed. A deduction on the slip that never shows in the passbook needs raising with HR at once.
- TDS matches your regime. If you chose the old regime to claim HRA or 80C, TDS should reflect it. If it looks too high, update your investment declaration with HR.
- Loss of pay. An unexplained loss-of-pay day is money deducted. Check the attendance summary.
- The year-to-date column. It should match Form 16 at the end of the year, and Form 16 should match your Form 26AS and AIS.
What to do next
- Open your latest payslip and find each line in this guide.
- Check this month's PF credit in your EPFO passbook.
- Read [CTC vs in-hand salary](/earn-more/ctc-vs-in-hand-salary-india) to see where the rest of your package goes.
