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Guide To Payroll & Tax: For HR Beginners & Employees

Another year of payroll, taxation, and performance appraisal has drawn closer. It’s chaos for all three parties, the employer, the employee, and the middleman Human Resource department. The first three months of the year, always revolve around performance assessment, salary hike, ITR, layoffs - sounds a bit scary - and last but not the least job switches.

Financial year-end doesn’t seem to be a lot happening to many, but for some, it’s a stroke of luck. So, what should one know or should be aware of during this season? Be it anything tax slab, salary slip components, tax abbreviation, we will try to cover everything.


The total of all earnings that an employer pays to the employee in a cycle on a given date is Payroll. A paycheck includes salaries, wages, deductions, bonuses, and net pay. Besides remunerating the employees, payroll also includes the taxes that employees are required to pay, which are a part of deductions.

There are many components of a paycheck, and usually, employees walk-up to HR for every queries related to their paychecks. An employee should know the basic components of salary and how it is calculated. Here is a basic guide to salary components.

Salary Components

Cost To Company (CTC)

The amount an employer spends on an employee in a particular year.

The Break-Up:

CTC = Monthly Gross Salary + Other Benefits + Bonus Component

Basic Salary

An amount that is paid to an employee before any extras are added or taken off. It is a part of the gross and net salary.

Gross Salary

An amount calculated by adding up employees' basic salary and allowances, prior to deductions. It also includes bonuses, overtime pay, holiday pay, and other wages.

The Break-Up:

Gross Salary = Basic Salary + HRA + Other Allowances

Take-Home Salary

The Net salary or take-home salary is paid to an employee after deductions, which include tax deducted at source (TDS) and other deductions as per the relevant company policy.

The Break-Up:

Net Salary = Basic Salary + HRA + Allowances - Income Tax - Employer's Provident Fund - Professional Tax


Allowances include house rent allowance (HRA), conveyance, medical allowance, incentives, etc. Allowances differ as per company policy.

Professional Tax

A tax charged by the state government to let an individual work in a certain profession. The amount varies depending upon the monthly salary and the state in which one works. The maximum professional tax levied per year is INR 2,500.

The following states and union territories are excluded from professional tax:

Arunachal Pradesh, Andaman & Nicobar, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Delhi, Goa, Haryana, Himachal Pradesh, Jammu & Kashmir, Lakshadweep, Nagaland, Punjab, Rajasthan, Uttarakhand, and Uttar Pradesh.

Provident Fund (PF)

A fixed percentage of the amount, which is deducted monthly from employee's paycheck along with an equal contribution by the employer is contributed towards the provident fund scheme. The employee gets a lump sum amount, including self and employer's contribution with interest on both, on retirement. Contributions made by the employee and the employer equals 12% of the employee's basic pay.

A contribution is mandatory in either of the following:

Case 1: Basic salary < 15000 (per month)
12% of the basic salary

Case2: Basic salary > 15000 (per month)
Here, the company has an option to either contribute 12% of 15,000 (i.e. 1800) or 12% of basic salary.

The contributions are deposited in the employee’s PF account. You can check your balance here

Also read, Employees May Soon Take Home More Salary


Employees' State Insurance Corporation (ESIC) manages Employees' State Insurance (ESI), a self-financing social security and health insurance scheme for Indian workers. It is formed to provide employees and their family members medical care and other benefits. Employees whose monthly incomes does not exceed Rs. 21,000 per month, are eligible to avail benefits under this scheme.


A part of the salary that is paid to the employee only after 5 years of services offered by the employee. The amount is deducted monthly from the cost to company (CTC) that an employer will spend on an employee in a particular year.


Taxes are categorised as direct and indirect taxes. Direct tax is a tax one pays on the income, whereas indirect tax is the taxes that one pays at restaurants, theatres, e-commerce websites, etc. Direct Taxes are broadly classified as:

Corporate Tax: The tax that companies pay on the profits they make from their businesses.

Income Tax: The tax imposed by the government on income received by an individual. Individuals eligible for tax must file an income tax return annually to determine their tax responsibilities.

Deadlines one should know for income tax returns (ITR):

31 January
Deadline to submit your investment proofs

31 March
Deadline to make investments under Section 80C

31 July
Last date to file your tax return

Oct – Nov
Time to verify your tax return

For a complete list of deadlines, click here

For tax slabs read, It's Time To Review Your Tax Slab & Save On Taxes

eHRMS by Neural IT is a cloud-based software helping simplify daily HR tasks. Digitize your HR function & let eHRMS empower HR’s to easily onboard new hires, track employee progress, and analyze data to support employee development and organisation.

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Payroll is important, and taxes are more important. Here is a quick guide to the basic Salary Components of Payroll and Tax for HRs and Employees.
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Guide To Payroll & Tax: For HR Beginners & Employees | eHRMS

7 Effective Questions To Gauge Your Interviewee

Being an interviewer, how well do you remember the last interview you took or how well is the selected employee performing. It should take you back to the day when you interviewed the employee or let’s say how effectively you gauged the employee.

An interviewer should always scan through the resume before an in-person meeting. A resume gives you 70% overview of candidates alma matter and experiences if any. 

The following mentioned questions have been designed for both a fresher as well as experienced interviewee.

1. How Well Versed Are You With The Current Job Profile?

It doesn’t sound like a question that should be on top, but an interviewee should know what role he/she is applying for and what are his/her expectations from a position. How the candidate responds to this question is where you can judge whether he/she fits the requirement.

2. How Would You Relate Your Past Experience To The Current Role? 

This one can be put across to someone with experience. A candidate with years of experience should be able to relate his past role to the current position he/she is applying for. An interviewer can assess the candidate on how they tie their responsibilities listed in the job description for the new position with their previous responsibilities.

3. Why Are You Applying for This Position?

This question gives an insight into why they are looking for a change and whether they have done market research on the profile they are looking for. It also lets one know how enthusiastic the candidate is about the position.

4. What Is Your Salary Expectations?

This question is mostly discussed at the end after the interviewer is stationed to settle with the candidate for the position. But it should always be considered a priority as the whole interview session won’t make sense if the candidate has higher expectations.

5. How Soon Can You Join?

A candidate might have commitments to his/her previous organisation, so would an interviewer to fill the position. Different companies have different policies with a varied range of minimum 7 days to a maximum of 90 days notice period. This question should be put across once the salary part has been discussed.

6. What Are Your Interests And Hobbies?

Interests and Hobbies depict a picture of how well a candidate socializes, which can help one know how better team player the candidate is. This question can also help one break the ice. An interview session is always considered one-way talk, discussing interests and hobbies can make it a conversation.

7. Do You Have Any Questions For Me?

This question should always be a part of an interview session. Candidates have several questions to be asked but always park it for the joining day. The interviewer should always answer this question as it is often ignored, leaving the candidates confused.

eHRMS by Neural IT is a cloud-based software helping simplify daily HR tasks. Digitize your HR function & let eHRMS empower HR’s to easily onboard new hires, track employee progress, and analyze data to support employee development and organization.

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An interviewee always anticipates questions asked by an interviewer. Read the questions or come up with some unique ones to catch them out of the box.
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7 Effective Questions To Gauge Your Interviewee | eHRMS

Signs Your Employee Is About to Quit

The major concern for employers is employee turnover. Resignation of your loyal employee can be expensive as it involves the cost of hiring, training, onboarding, lost productivity, and business errors. An HR professional suffers this loss besides losing an employee. HR and managers should be aware of the signs that an employee is about to quit. In some cases, there are obvious signs like skipping meetings, not following up on a project, showing late at work, showing less zest towards their job.

Signs An Employee Shows Before Quitting 

Drop in Productivity: An important sign when a normally productive, punctual, reliable employee suddenly becomes dependable or less productive. Any behavioral changes like showing up at work but not being fully present is a huge sign that your employee is going to quit.

Major Life Changes: Major life changes an employee may come across in his life are getting married, divorced, having children, sick family members, or purchasing a new home. These major changes can shake things up and influence an employee whether to stay or leave your company. For example, having a child can force someone to look for a job that pays more money.

Less Communicative And Less Fulfilled: Communication is a key factor in any modern workplace environment. Good communication flow in your company will lead to fewer arguments, more productivity, and compatibility between your workforce. Good communicators can be easily spotted. If an employee is no longer satisfied with the job position, he will show less productivity or invest little time in the work. HRs should consider these signs as a quitting sign.

Avoiding New Assignments: Is your employee backing off to accept a new assignment? Is he coming up with new excuses for not scheduling certain tasks for the future? This indicates that he has something locked up ahead and doesn’t want to put his manager in a worse situation by not completing the work or extending the deadline. Your employee may feel that he is helping you out by not taking up work and expecting that the work should be handover to someone else in the company so that some other person can get used to that work and take it over after they leave for a new job.

By noticing these signs, intervene at the right time before it’s too late. Employees are different from each other; some are open and are willing to share their reason for quitting while some are not. If you find an employee quitting, handle with professionalism, give them an understanding which would benefit both the company and employee.

eHRMS by Neural IT is a cloud-based software helping simplify daily HR tasks. Digitize your HR function & let eHRMS empower HR’s to easily onboard new hires, track employee progress, and analyze data to support employee development and organization.

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Drop in productivity, less communicative and major changes in life are signs of employees quitting their workplace. Stop them before they move out.
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Signs Your Employee Is About to Quit | eHRMS

10 Important Recruitment Stats of 2019

We are halfway through 2019, so let’s take a look at some of the most important statistics about recruitment in news so far. 

The stats might help you make the best hiring decision for the next half of 2019. This data gives you an insight into the current hiring state. The gathered data is the result of research done by top industry leaders like LinkedIn, Glassdoor, Deloitte, PayScale, ERE, and Thomson Reuters.

Let’s dive into the stats of 2019

1. The “Hiring Funnel” from Talent Function Group LLC

The “hiring funnel” or yield model for every job helps recruiters understand how many total applications need to be generated to get a single hire. It depicts the success rate of the hiring process. Let's simplify it with an example; in an online job posting, on average, 1,000 individuals will see the post, 200 will begin the application process, 100 will complete the application, 75 of those 100 resumes will be screened, 25 resumes will be seen by the recruiting manager, 4 to 6 will be invited for an interview, 1 to 3 of them will be invited back for the final interview, 1 will be offered that job, and 80 percent of those receiving an offer will accept it.

2. According to the stats provided by ERE Recruiting Intelligence, 250 applicants on an average are attracted towards a  job opening.

3. LinkedIn stats states, the top trends shaping the future of recruiting and hiring are:

  • Data (50%)
  • Diversity (78%)
  • Artificial intelligence (35%)
  • New interviewing tools (58%)

4. The top factors influencing hiring decisions in an in-person interview according to Jobvite are:

  • Prior experience
  • Conversation skills
  • Knowledge of the industry
  • Cultural fit

5. Millennial Branding, a personal branding agency, says the top reasons for millennials to leave their company are that they receive a better job offer from another company (30%), their career goals weren’t aligned with their company (27 %), or they saw a lack of career opportunities within the company (13 %).

6. 69% of candidates would most like to see an improvement in employer response time. An employee would appreciate a response upfront from the recruiter, especially if the average response time is a couple of weeks.

7. Employer Branding is one of the important aspects considered by a candidate looking out for a job. As per Glassdoor, 69% of job seekers wouldn't take a job in a company with a bad reputation.

8. It's the age of millennials, and they cannot do without technology. Social Recruiting, as per Aberdeen Group 73% of millennials found their last position through social media.

9. MRI Network stated that more than half of millennials (53% ) say that career pathing has the most impact on their decision to stay with their employer.

10. Finally, one for women empowerment, an analysis of more than 20,000 firms in 91 countries found that companies with more female executives are more profitable.

Statistics provided by these top firms give us an insight into the best and worst ways to recruit, hire, and develop top talent. These stats, when used in combination with HR software, help HR professionals to simplify entire HR operations. The business of providing HR solutions is on the rise, and HR professionals can overcome any problem faced in their day-to-day HR activities using these solutions.

eHRMS by Neural IT is a cloud-based software helping simplify daily HR tasks. Digitize your HR function & let eHRMS empower HR’s to easily onboard new hires, track employee progress, and analyze data to support employee development and organization.

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Recruiters are constantly looking to revamp their hiring efforts. Here are the trends and insights for recruiting the best candidate.
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10 Important Recruitment Stats of 2019 | eHRMS

Importance of Feedback

What exactly is feedback? We hear this term all the time, but do we truly know what it is and why it is so important? Feedback shows a pathway for betterment. Effective feedback, both positive and negative, is widely used as a management device by professionals. Top performing companies remain on top as they consistently search for ways to make the best company even better. A focus based on true feedback, across the organisation including customers, employees, clients, etc. helps in continuous improvement.

1. Motivation: Feedback can actually motivate employees. They feel valued and appreciated by the feedback they get from their managers. Any feedback from clients, suppliers, stakeholders can be used to motivate and build better work relations. Feedback is often taken as criticism. Negative feedback helps to formulate better decisions to improve and increase performance.

2. A Tool for Continued Learning: Feedback helps in aligning goals, creating strategies, develop products, improve service and relationships, and much more. Continuous learning is the key to improvement. Invest time in learning and asking about an employee’s experience with your organisation. This investment can save time in the long run.
3. Elevates Engagement: Employees seek feedback; regular feedback is essential for their professional growth. Consistent communication between an employee and manager helps in higher engagement. Correct feedback can motivate staff to perform better and can be a tool for building and maintaining communication. A performance management program can help in promoting and improving employee engagement.

4. Improves Work Relationships: Feedback can open all communication channels in the workplace. It is useful in avoiding conflicts or tension between employees. Feedback is one way of getting things out in the open so that there would be no issues. Small issues can be resolved before they get a chance to grow into something bigger. If employees get feedback on their performance, they may improve on their job roles. An organisation needs a healthy open culture where employees can give and receive feedback on a regular basis.  

These best feedback practices can help you in work and life. Use these ways to be proactive in your organisation and make your workplace better and improve your skills. Promote feedback within your team and give time to get used to open-minded and new feedback friendly environment. Give time for a feedback session in your organisation. Include feedback sessions in your planning process.


eHRMS by Neural IT is a cloud-based software helping HR’s to simplify their daily tasks. Digitize your HR function & let eHRMS empower HR’s to easily onboard new hires, track employee progress, and analyze data to support employee development and organisation.

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Feedback is important for success at every organisational level. Learn ways of how feedback can help an employee and organisation.
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Importance of Feedback | eHRMS

Yoga At Workplace Can Indeed Lower Your Stress

Regular work-changing environment and routine work increase stress on employees. This work-related stress leads to anxiety, depression, reduced productivity, low morale, and employee turnover. Searching for ways to get rid of the stressful work environment, organizations are discovering numerous benefits of yoga based wellness programs.

Benefits of yoga

The art of practicing yoga helps in controlling the mind, body, and soul. It gives an overall benefit of practicing yoga in an individual’s health and his well-being. It helps in managing anxiety, stress, keeps you relaxed and increases flexibility, muscle strength, and body tone. It improves respiration, vitality, and energy.

1. Lowers stress: A stressful office life, the pressure to meet deadlines, workload stress, and trying to balance personal and professional life can be hectic. Engaging in mindful breathing exercises and stretch through yoga poses can balance out the stress leading to more positive output at your workplace.

2. Better posture: An imperfect posture can lead to back pain. Working continuously on a computer can have a negative impact on your posture. Practicing yoga will help you to align and correct your posture.

3. Helps with creativity: Yoga helps you to concentrate and focus on the work and also opens the minds so that a person can think outside the box.

4. Increases positivity/morale: Healthy, relaxed and focused employees are more productive, creative. If they feel well physically mentally and emotionally, their morale would be high. Offering yoga classes at work or off-site is a cost-effective way to achieve good and productive employees.

Yoga at work desk

1. Seated Tadasana: Raise your both hands and try to straighten your elbow as much as possible, spread your fingers wide, engage your abs as you sit up tall, soften your shoulders, stack your head directly over your torso, and lift your chin up and back a tiny bit to help align your spine and find good posture, stay and breathe for 3-5 seconds slowly.

2. Seated Side Stretch: Raise your right hand up and tilt the arm to the left side find as much as length possible. Palm can face to the left. Keep space between your shoulders and ears.

3. Forward Fold: From shoulder stretch, drop your arms to the floor with the top of your head, gently nod your head “yes” and “no” to release tension in the back and neck. Keep your weight slightly forward into the balls of your feet.  

4. Chair Pigeon Pose: Sit normally on the chair, keep both your feet flat on the ground. Now place your right leg over your left in 90 degrees. Now press your foot in a way that the right ankle comes in line with the right knee. Hold for 3-5 breaths and repeat the entire process with your left knee.

5. Seated Twist: Sit tall in your chair, breathe deeply and as you exhale spin your body to either of the sides. Stay stagnant on the side you choose for 5 breaths and go back to normal position.


Importance of yoga

Yoga at the workplace leads to a positive work environment. A stress-free employee will work more efficiently, creatively and will discover the confidence to complete projects and solve problems creatively. Yoga develops best leadership skills, demonstrates employee appreciation and build a solid team from inside out.

eHRMS by Neural IT is a cloud-based software helping HR’s to simplify their daily tasks. Digitize your HR function & let eHRMS empower HR’s to easily onboard new hires, track employee progress, and analyze data to support employee development and organisation.

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Yoga At Workplace Can Indeed Lower Your Stress
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Yoga At Workplace Can Indeed Lower Your Stress

HR Business Partner: Opening New Career Fronts

When we talk about business and employee management for an organisation, ‘HR’ becomes a core part of the management to uplift the organisation to reach its management goals. The HR industry has been very elusive in understanding and making the right choice for the company.

The HR sector works for the compliance of a company and takes the lead role in managing the administration and filing of employee details. The need to have an HR wing rose with the necessity of employee laws, documentation and other complexities of employee management. With the passage of time, this industry is no longer restricted to just management functionalities but has outgrown into a more valuable higher asset of the company.

On the way to grow in the HR industry, a specific career path termed as 'HR Business Partner’ was coined and highly popularised by academic and consultant David Ulrich. He is well known for his modern HR function approach and has claimed, ‘ An HR Business Partner is the new development tool that helps the senior leadership to reach their organisational goals efficiently’.

But, what is an HR business partner? What is its role?

To summarise, the definition of an HR business partner is an experienced human resource professional who acts closely with the senior leaderboard of an organisation to develop a direct HR agenda that aims to support the organisational roles.

An 'HR Business Partner' plays a pivotal role in collaborating with executive leadership with the human resource department by being on the board of Directors.
The other roles include:

  • Developing HR agenda to reach organisational roles
  • Producing the aims and goals achievable by the organisation
  • Strategizing to fulfill the workforce and management needs
  • Developing schemes for smooth management of the organisation

The role is involved more in strategizing for the employer to reach their goals than to implement the devised strategies also looking into the internal needs of the organisation.

So if you're thinking of pursuing a role in HR Business Management front, but your current responsibilities and tasks are stopping you, then we have a solution for you to make you achieve your dreams of development effortlessly. What is the solution?

eHRMS- A modern tool designed by Neural IT to solve all the problems of today's HR and keep them away from trouble and heavy work, which in return saves time for your own personal and professional growth.  

Today, human resource management systems are designed and developed to be the  one-stop solution for all human resource responsibilities in an organisation with an intention to make an HR’s work more sustainable, smooth and without errors.
The basic features offered by the top software are just one click solutions such as:

  • Payroll generation with data accuracy
  • Easy employee activity management
  • Effective implementation of HR policies
  • 360-degree view of Employee data
  • Paperless, Cloud storage
  • Error Free Letter generation and reports
  • Paving way to HR productivity

With all such great benefits, most organisations provide lifetime support to assist your progress additionally continually adding features to enhance their current software. 

eHRMS by Neural IT eases an HR's work and also helps in increasing the transparency between the 'Employees and the Organisation'.

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On the way to grow in the HR industry, a specific career path termed as 'HR Business Partner’ was coined and highly popularised
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HR Business Partner: Opening New Career Fronts
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