HR Glossary

HR & Payroll Glossary: the terms on your payslip, explained

Clear, plain-language definitions of the HR and payroll terms people search for most, from CTC and gratuity to PF, ESI and notice period. Each links to a free tool to work out your own numbers.

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Pay and salary terms

CTC (Cost to Company): The total annual cost of employing you, including gross salary plus employer contributions like PF. It is not your take-home pay.
Gross salary: Your salary before deductions such as PF, professional tax and income tax.
Net / in-hand salary: What actually reaches your bank account after all deductions.
Basic + DA: Basic salary plus dearness allowance, the base used to calculate PF, gratuity and HRA.

Statutory and benefit terms

Gratuity: A lump sum paid for long service, normally after 5 years, calculated as (Basic + DA) × 15 ÷ 26 × years, capped at ₹20,00,000.
PF / EPF: Provident Fund, a retirement saving where you and your employer each contribute 12% of Basic + DA.
ESI: Employees' State Insurance, a health and social-security scheme for employees earning up to a wage threshold.
HRA: House Rent Allowance, a salary component that is partly tax-exempt if you pay rent, under Section 10(13A).
Professional tax: A small state-level tax on salaried income, capped at ₹2,500 per year.

Employment terms

Notice period: The time you must continue working after resigning, or that an employer must give before ending employment, as set in your contract.
Probation period: An initial period at the start of a job during which either side can end the employment more easily.
Full and final settlement: The final payment when you leave a job, including dues, leave encashment and any gratuity, minus recoveries.

Related free tools

Work out your own numbers with Take-home Salary Calculator, Gratuity Calculator, HRA Calculator, PF Calculator.

Questions, answered

Frequently asked questions

What is CTC?

CTC, or Cost to Company, is the total annual cost of employing you, including your gross salary plus employer contributions such as PF. It is higher than your take-home pay, because deductions and employer costs are included.

What is the difference between gross and net salary?

Gross salary is your pay before deductions. Net or in-hand salary is what reaches your bank account after PF, professional tax, income tax and any other deductions.

What is Basic + DA and why does it matter?

Basic + DA is your basic salary plus dearness allowance. It is the base figure used to calculate PF, gratuity and HRA, so a higher Basic changes several of your statutory amounts.

What is a notice period?

A notice period is the time you must keep working after resigning, or that an employer must give before ending your employment. The length is set in your employment contract or company policy.

Please note: Outputs are AI-generated and can contain errors. Use them as a starting point and check anything important before you act on it.

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The Take-home Salary Calculator turns these terms into your real in-hand pay, with gratuity, HRA and PF for India built in.

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