What is salary in hand
Salary in hand is the amount of money that an employee receives after all deductions have been made. This includes deductions for income tax, provident fund, and other statutory payments. The salary in hand is the amount of money that the employee actually receives in their bank account on a monthly basis.
The formula for calculating the salary in hand is:
Salary in hand = Gross salary - deductions
- Gross salary is the total amount of money that the employee is entitled to receive before any deductions are made.
- Deductions are the amounts of money that are taken out of the employee's salary before they receive it. These deductions can include income tax, provident fund, and other statutory payments.
For example, if an employee has a gross salary of Rs. 100,000 and their deductions are Rs. 20,000, then their salary in hand will be Rs. 80,000.
Salary in hand is an important factor to consider when comparing job offers, as it is the amount of money that you will actually receive. It is also important to factor in the deductions when budgeting for your expenses.
Here are some of the deductions that can be made from an employee's salary:
- Income tax
- Provident fund (PF)
- Employee state insurance (ESI)
- Professional tax
- House rent allowance (HRA)
- Leave travel allowance (LTA)
- Medical insurance
- Other statutory payments
The amount of deductions that an employee has to pay will vary depending on their salary, their location, and their employment status. It is important to check with your employer or the relevant government agency to find out what deductions are applicable to you.
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