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HR Glossary

The words HR and payroll run on,
explained for India.

86 terms, each with a one-line answer, a fuller definition, and where it bites in Indian payroll practice. Written for the HR manager who just met the word in a payslip, a notice or a vendor call.

0-9

Performance360-degree feedback360-degree feedback gathers views on an employee from their manager, peers, direct reports and sometimes customers, alongside a self-assessment.

A

HR operationsAbsenteeismAbsenteeism is the rate of unplanned absence, measured as unscheduled absent days divided by scheduled working days, and an early signal of disengagement or a bad manager.

Hiring & onboardingApplicant tracking systemATSAn applicant tracking system manages job openings, applications, interview stages and offers in one pipeline, so hiring is visible and measurable.

Hiring & onboardingAppointment letterAn appointment letter is the employment contract issued on or before joining, confirming the terms of the offer and the policies the employee is bound by.

PerformanceAppraisalAn appraisal is the periodic review of an employee's performance against goals, producing a rating that drives increments, promotions and development plans.

HR operationsApproval workflowAn approval workflow is the configured chain of people who must say yes to a request (leave, expense, purchase, salary revision) based on amount, department and role, with delegation and an audit trail.

PayrollArrearsArrears are amounts owed for an earlier period and paid in a later payroll, usually after a backdated increment, a late attendance correction or a missed component.

HR operationsAsset management (HR)HR asset management tracks the laptops, phones, ID cards and tools issued to employees, who has what, and recovers them at exit.

Attendance & leaveAttendanceAttendance is the daily record of whether, when and for how long an employee worked, captured from punches and judged against shift rules to produce paid days.

Attendance & leaveAttendance regularisationAttendance regularisation is a request to correct a missed or wrong punch, approved by a manager, so the day is paid correctly instead of becoming loss of pay.

HR operationsAttritionAttrition is the rate at which employees leave, calculated as leavers in a period divided by average headcount, usually annualised and split into voluntary and involuntary.

B

Hiring & onboardingBackground verificationBGVBackground verification checks a candidate's identity, education, previous employment, address and criminal record before or shortly after joining.

PayrollBasic salaryBasic salary is the fixed core component of pay on which PF, gratuity, HRA and most statutory calculations are based.

Attendance & leaveBiometric attendanceBiometric attendance records punches using a fingerprint or face on a device at the workplace, sending them to the attendance system automatically.

C

PerformanceCalibrationCalibration is the meeting where managers compare proposed ratings across teams and adjust them so that a rating means the same thing everywhere.

Attendance & leaveCasual leaveCLCasual leave is short-notice paid leave for personal matters, usually 7 to 12 days a year, credited annually or monthly and not carried forward.

Attendance & leaveCompensatory offComp-offCompensatory off is paid leave granted in place of working on a holiday or week-off, usually to be used within a fixed window.

StatutoryCompliance calendarA payroll compliance calendar is the list of statutory due dates for the year: PF and ESI by the 15th, TDS by the 7th, quarterly 24Q, half-yearly ESI returns, PT and LWF on state schedules.

StatutoryContract labourContract labour is workers employed through a contractor rather than directly, regulated by the Contract Labour Act, with the principal employer responsible if the contractor defaults.

StatutoryContribution periodA contribution period is one of the two six-month spans in ESI, April to September and October to March, during which coverage, once established, continues regardless of wage changes.

HR operationsCost centreA cost centre is a unit (department, project, location) to which employee costs are allocated, so payroll cost can be reported the way finance budgets it.

PayrollCTCCost to CompanyCTC is the total amount a company spends on an employee in a year, including salary, employer contributions and benefits, not what the employee receives in hand.

D

PayrollDearness allowanceDADearness allowance is a cost-of-living component, common in government and public-sector pay, that is added to basic for PF and gratuity purposes.

E

Attendance & leaveEarned leaveEL / Privilege leaveEarned leave, also called privilege leave, is paid leave that accrues with service, can be carried forward within limits, and is encashable at exit.

StatutoryECRElectronic Challan cum ReturnThe ECR is the monthly PF return: a file listing every member, their wages and contributions, uploaded to the EPFO portal and paid in one step.

StatutoryEDLIEmployees' Deposit Linked InsuranceEDLI is a life-insurance benefit attached to PF, funded by an employer contribution of 0.5 percent of wages up to ₹15,000, paying up to ₹7 lakh to a member's family.

HR operationsEmployee self-serviceESSEmployee self-service lets employees see and act on their own HR data (payslips, leave, attendance, declarations, letters) from a portal or app without asking HR.

StatutoryEPSEmployees' Pension SchemeEPS is the pension part of PF: 8.33 percent of the employer's contribution, on wages up to ₹15,000, goes to a fund that pays a monthly pension after 58.

StatutoryESIEmployees' State InsuranceESI is a social-security scheme giving medical, sickness, maternity and disablement benefits to employees earning up to ₹21,000 a month, funded by a 0.75 percent employee and 3.25 percent employer contribution.

ExitExit interviewAn exit interview is a structured conversation with a leaving employee about why they are going and what could have kept them, used to reduce attrition.

PayrollExpense claimAn expense claim is an employee's request to be reimbursed for a business expense, with the receipt, category and amount, routed for approval.

F

TaxForm 16Form 16 is the annual TDS certificate an employer gives each employee by 15 June, showing salary paid and tax deducted, used to file the income tax return.

TaxForm 24QForm 24Q is the quarterly return of TDS on salaries that every employer files, with the fourth quarter carrying full-year salary details for each employee.

ExitFull and final settlementF&FFull and final settlement is the last payment to a leaving employee, covering pending salary, leave encashment, gratuity and bonus, less notice-period shortfall and recoveries.

G

Attendance & leaveGeo-fencingGeo-fencing restricts mobile punch-in to a defined radius around a location, so field and site staff can mark attendance only when they are actually there.

StatutoryGratuityGratuity is a lump sum paid by the employer to an employee who leaves after five or more years of continuous service, at fifteen days' wages for every completed year.

HR operationsGrievanceA grievance is a formal complaint by an employee about their work, treatment or conditions, handled through a defined process with timelines and records.

PayrollGross salaryGross salary is the total pay earned in a period before any deductions, made up of basic, allowances and any variable pay.

H

HR operationsHeadcountHeadcount is the number of employees on the rolls at a point in time, reported by department, location and type, and the base for most HR ratios.

Attendance & leaveHoliday calendarA holiday calendar is the list of paid public holidays for the year, which in India differs by state and often by branch, including national and optional (restricted) holidays.

PayrollHRAHouse Rent AllowanceHRA is an allowance paid towards rented accommodation that is partly exempt from income tax under the old regime.

HR operationsHRMSHuman Resource Management SystemAn HRMS is software that runs HR processes end to end: the employee record, attendance, leave, payroll, hiring, performance and employee self-service on one database.

I

PayrollIncrementAn increment is a revision of salary, usually annual, expressed as a percentage of CTC or basic and effective from a stated date.

TaxInvestment declarationAn investment declaration is the employee's statement at the start of the year of the deductions and exemptions they plan to claim, so TDS can be computed correctly; proofs follow in January.

K

PerformanceKPIKey Performance IndicatorA KPI is a measurable value that shows how well an individual, team or company is achieving a goal, such as revenue per month or attrition rate.

PerformanceKRAKey Result AreaA KRA is a major area of responsibility for a role, against which specific measurable KPIs are set and assessed in the appraisal.

L

StatutoryLabour codesThe four labour codes consolidate 29 central labour laws into codes on wages, social security, industrial relations, and occupational safety and health.

Attendance & leaveLeave balanceLeave balance is the number of days of each leave type an employee has available, after accruals, usage, carry-forward and lapses.

Attendance & leaveLeave encashmentLeave encashment is the payment of unused earned leave as salary, either during service under policy or at exit as part of the final settlement.

PayrollLoss of payLOPLoss of pay is a deduction for days an employee was absent without available leave, computed on gross or on specified components per day.

StatutoryLWFLabour Welfare FundLabour Welfare Fund is a small state-level contribution from employee and employer, deducted once or twice a year, that funds welfare schemes for workers.

M

Attendance & leaveMaternity leaveMaternity leave in India is 26 weeks of paid leave for the first two children (12 weeks thereafter) under the Maternity Benefit Act, for women with 80 days of service in the past year.

StatutoryMinimum wagesMinimum wages are the lowest daily or monthly wages an employer may pay, fixed by each state for categories of work and skill and revised with a dearness component twice a year.

HR operationsMobile app (HR)An HR mobile app puts attendance, leave, payslips and approvals on the employee's phone, which for shop-floor, field and store staff is the only device they use.

Attendance & leaveMuster rollThe muster roll is the statutory register of daily attendance for each employee, the record payroll pays on and inspectors ask for.

N

PayrollNet salaryNet salary, or take-home, is what remains after statutory and voluntary deductions are subtracted from gross salary.

ExitNotice periodThe notice period is the time an employee or employer must give before ending employment, typically 30 to 90 days, with pay in lieu for any shortfall.

O

Hiring & onboardingOffer letterAn offer letter is the formal proposal of employment stating role, CTC, joining date and key terms, which becomes binding when the candidate accepts.

PerformanceOKRObjectives and Key ResultsOKRs are a goal-setting method pairing a qualitative objective with three to five measurable key results, set quarterly and shared openly across the company.

TaxOld vs new tax regimeIndia offers two ways to compute income tax on salary: the old regime with exemptions and deductions, and the new regime with lower slab rates and almost none.

Hiring & onboardingOnboardingOnboarding is the process from offer acceptance to a productive first month: documents, statutory registrations, assets, access and introductions.

Attendance & leaveOvertimeOvertime is work beyond the standard daily or weekly hours, paid at twice the ordinary rate under the Factories Act and most state shop acts.

P

Attendance & leavePaternity leavePaternity leave is leave for new fathers; there is no central law for private employers in India, so it is a company policy, commonly 5 to 15 days.

PayrollPayroll cycleThe payroll cycle is the recurring sequence of collecting attendance and inputs, computing pay, approving, paying and filing for one pay period.

PayrollPayroll reconciliationPayroll reconciliation is the check that this month's payroll totals agree with last month's plus explained changes, and that statutory registers agree with the payslips.

PayrollPayslipA payslip is the monthly statement given to an employee showing earnings, deductions, net pay and the statutory numbers behind them.

TaxPerquisitesPerquisites are non-cash benefits an employee receives from the job, such as a company car, rent-free accommodation or stock options, valued and taxed as salary under prescribed rules.

PerformancePIPPerformance Improvement PlanA PIP is a formal, time-bound plan with specific goals and support for an employee whose performance is below expectations, with a clear outcome at the end.

HR operationsPOSHPrevention of Sexual HarassmentPOSH refers to the Sexual Harassment of Women at Workplace Act, 2013, which requires every employer with 10 or more employees to have an Internal Committee, a policy, training and an annual report.

Hiring & onboardingProbationProbation is the initial period of employment, commonly three to six months, during which performance is assessed before the employee is confirmed.

StatutoryProfessional taxPTProfessional tax is a state-level tax on salaried income, deducted monthly by the employer according to the slab of the state where the employee works, capped at ₹2,500 a year.

StatutoryProvident FundEPFThe Employees' Provident Fund is a retirement savings scheme where employee and employer each contribute 12 percent of basic wages every month, managed by the EPFO.

R

PayrollReimbursementA reimbursement repays an employee for money spent on the company's behalf, against a receipt and within policy limits.

ExitRelieving letterA relieving letter confirms that an employee has been released from their duties on a stated date after completing exit formalities, and is required by most next employers.

Hiring & onboardingRequisitionA requisition is the approved request to hire for a position, stating the role, grade, budget and reason, before a job is published.

S

PayrollSalary registerThe salary register, or muster-cum-wage register, is the statutory record of every employee's earnings, deductions and net pay for each month.

PayrollSalary structureA salary structure is the set of components, rules and percentages that turns a CTC into monthly earnings and deductions.

Attendance & leaveShift rosterA shift roster is the plan of who works which shift on which day, published ahead of the week, against which attendance is judged.

Attendance & leaveSick leaveSLSick leave is paid leave for illness, usually 7 to 12 days a year, with a medical certificate required beyond two or three consecutive days.

PayrollSpecial allowanceSpecial allowance is the balancing component of a salary structure that absorbs whatever gross is left after basic, HRA and fixed allowances.

TaxStandard deductionStandard deduction is a flat amount subtracted from salary income before tax, ₹75,000 under the new regime and ₹50,000 under the old, with no proof required.

StatutoryStatutory bonusStatutory bonus is the annual bonus employers with 20 or more employees must pay under the Payment of Bonus Act, between 8.33 and 20 percent of wages, to employees earning up to ₹21,000 a month.

T

TaxTDSTax Deducted at SourceTDS on salary is the income tax an employer deducts every month from an employee's pay, based on projected annual income, and deposits with the government on the employee's behalf.

U

StatutoryUANUniversal Account NumberThe UAN is a 12-digit number issued by the EPFO that stays with an employee across jobs and links all their PF member IDs.

V

StatutoryVPFVoluntary Provident FundVPF is an employee's voluntary contribution to PF above the statutory 12 percent, earning the same interest, with no matching employer share.

W

Attendance & leaveWeek-offA week-off is the paid weekly rest day every employee is entitled to, fixed by roster and not necessarily a Sunday.

By topic

Payroll · 17Statutory · 16Tax · 7Attendance & leave · 17Hiring & onboarding · 7Performance · 7HR operations · 11Exit · 4

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