Your salary slip is the only document that tells you what you were actually paid, and most people look at one number on it. The rest — the line that says Professional Tax, the one that changed in February, the row that appeared once and never again — goes unread until the amount drops and nobody can explain why.
This guide goes through every line a salary slip carries, what each one is doing there, and the eight reasons the figure at the bottom moves from one month to the next. Including the one that causes most of the panic: why TDS can double in February and March.
What a Salary Slip Has to Show
A payslip has three blocks, and knowing which block a line sits in tells you most of what you need.
| Block | What it contains | Effect on what you are paid |
|---|---|---|
| Earnings | Basic + DA, HRA, allowances, bonus, arrears, overtime | Adds up to gross |
| Deductions | Employee PF, ESI, Professional Tax, TDS, voluntary PF, loans, loss of pay | Subtracted from gross |
| Employer contributions | Employer PF, employer ESI, gratuity provision | None — shown for information |
That third block is where most confusion starts. Employer PF appears on many payslips and is never paid to you; it goes into your PF account. Some employers show gratuity too. Neither affects the credit to your bank, and adding them to your earnings will give you a number you never received.
Gross minus deductions equals net pay. That is the figure that reaches your account, and the only one on the slip that matches your bank statement.
The Earnings Side, Line by Line
Basic + DA. The base of everything. Your PF, gratuity and statutory bonus are all computed from it, and under the Code on Wages, 2019 it must be at least 50% of total remuneration. If your Basic looks low relative to gross, your statutory dues are still being computed on the higher deemed figure.
House Rent Allowance. Usually 50% of Basic in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad, and 40% elsewhere. Appearing on the payslip does not make it exempt — the exemption is claimed against rent actually paid, and only in the old tax regime.
Special or other allowance. The balancing figure that brings the structure up to the agreed gross. Fully taxable. If it is very large relative to Basic, the structure is weighted towards cash now and away from retirals.
Conveyance, telephone, books and similar. Some are reimbursements needing bills, some are allowances paid regardless. The payslip rarely distinguishes them; your FBP declaration does.
Arrears. A back-dated increment or a revision paid late. It appears once, inflates that month's gross, and inflates that month's TDS with it.
Overtime. Under Section 14 of the Code on Wages it is payable at twice the ordinary rate of wages. If your slip shows overtime at a single rate, that is worth raising.
The Deductions Side, Line by Line
Employee PF. 12% of wages. Where the employer applies the statutory ceiling, that is ₹3,000 a month — the ceiling rose from ₹15,000 to ₹25,000 on 17 September 2026, so a deduction that moved from ₹1,800 to ₹3,000 around then has an explanation. Where the employer applies actual Basic, it is 12% of the full figure and considerably more.
Voluntary PF. Anything above the mandatory 12%, entirely your choice, and stoppable in most organisations.
ESI. 0.75% from you, only if gross wages are ₹21,000 a month or below. If your gross crosses that threshold mid-year, ESI continues until the end of the contribution period rather than stopping immediately.
Professional Tax. A state levy, capped at ₹2,500 a year nationally by Article 276 of the Constitution. In Karnataka and Maharashtra it is ₹200 a month with ₹300 in February — which is why February's payslip is ₹100 lighter and no one ever explains it. Tamil Nadu and Kerala bill half-yearly, so it appears twice a year rather than monthly. Odisha, Chhattisgarh and Goa do not levy it on salaried employees at all.
TDS. Your estimated annual tax divided across the remaining months, under Section 192. This is the line that moves, and the next section is about why.
Loss of pay. Unpaid leave, recovered at a daily rate.
Eight Reasons Your Salary Changed This Month
- February in Karnataka or Maharashtra. Professional Tax is ₹300 instead of ₹200. A ₹100 difference, every year, in the same month.
- You submitted or missed an investment declaration. The largest cause by far. See the next section.
- Loss of pay. One unpaid day on a ₹60,000 gross is roughly ₹2,000, and it reduces PF and ESI with it.
- An increment took effect. Higher gross, higher PF, and a recalculated annual tax spread over fewer remaining months — so take-home can rise by less than you expected.
- Arrears were paid. A one-off addition to gross, taxed in the month received.
- You crossed the ESI threshold. ESI stops, but only at the end of the contribution period, not the month you crossed.
- Your PF basis changed. An employer switching from the ceiling to actual Basic, or the September 2026 ceiling revision, changes the deduction permanently.
- A bonus or variable payout landed. Taxed in the month of receipt, which is why a bonus month often feels smaller than the bonus.
Why TDS Doubles in February and March
This is the single most common salary shock, and it is entirely predictable once you see the arithmetic.
Your employer estimates your annual tax in April and deducts one-twelfth each month. That estimate uses the investments you declared. In December or January they ask for proof. Anything you cannot prove comes out of the estimate, the annual liability is recalculated, and the shortfall is recovered over whatever months are left.
Take an employee on ₹15,00,000 CTC in the old regime who declared ₹1,50,000 of Section 80C investments in April:
| Annual tax | Monthly TDS | |
|---|---|---|
| With ₹1,50,000 of 80C, as declared | ₹87,900 | ₹7,325 |
| Without it, after proof is not submitted | ₹1,11,612 | — |
By December, nine months at ₹7,325 have been deducted — ₹65,925. The real liability turns out to be ₹1,11,612. That leaves ₹45,687 to be recovered across January, February and March: ₹15,229 a month.
The TDS line more than doubles — 2.08 times what it was — for the last three months of the year. Nothing went wrong and nothing was miscalculated. The proof simply did not arrive.
The fix is boring and works: declare only what you will actually invest, and submit proof by the deadline rather than at it. If you genuinely cannot invest what you declared, tell payroll in November instead of January — the recovery is then spread over five months rather than three.
The same mechanism runs in reverse. Declare late, and the first months are over-deducted; once the declaration lands, the remaining months fall. That refund is not a bonus, it is your own money returning.
Loss of Pay, and How It Is Calculated
There is no single statutory formula, and employers use different ones. The two common methods:
- Calendar days. Monthly gross ÷ days in the month × days of LOP. A day in February costs more than a day in March, because the divisor is smaller.
- Fixed 26 or 30 days. A constant divisor regardless of the month.
Ask which one your employer uses — it is in the HR policy and it changes the number. Note also that LOP reduces PF and ESI in proportion, so the total reduction is larger than the wage loss alone.
Arrears, and Why They Look Over-Taxed
An increment back-dated to April but paid in September arrives as a lump sum. It is taxed in the month of receipt, on top of that month's regular salary, which can push the month's TDS well above normal.
This usually corrects itself, since the annual liability is what matters and the remaining months adjust. Where arrears relate to an earlier financial year and cause genuine hardship, relief under Section 89(1) exists and is claimed with Form 10E when filing your return.
Checking Your Payslip Against Form 16
Once a year, do this. It takes ten minutes and catches real errors.
- Add the gross from all twelve payslips. It should match Part B of Form 16.
- Add the TDS from all twelve. It should match Part A, and it should appear in your Form 26AS.
- Check that every exemption you claimed — HRA, LTA — appears in Form 16. If it is missing, the proof did not reach payroll.
- Check PF against your EPFO passbook. Both halves should be credited.
TDS shown on a payslip but missing from Form 26AS means it was deducted and not deposited. That is worth raising immediately and in writing, because you cannot claim credit for tax that was never remitted.
Frequently Asked Questions
Why is my salary less in February?
In Karnataka and Maharashtra, Professional Tax is ₹300 in February against ₹200 in other months, so the year totals ₹2,500 rather than ₹2,400. Beyond that, February and March are when unproven investment declarations are recovered, which is a much larger effect — often doubling the TDS line.
Why did my TDS suddenly increase?
Usually because an investment declaration was not backed by proof. On a ₹15,00,000 package in the old regime, declaring ₹1,50,000 of 80C gives a monthly TDS of about ₹7,325; without the proof the annual liability rises to ₹1,11,612, and after nine months of lower deductions the balance of ₹45,687 is recovered over three months — about ₹15,229 a month, more than double.
What is the difference between gross and net pay on a payslip?
Gross is the total of the earnings block. Net is gross minus the deductions block — employee PF, ESI, Professional Tax, TDS and anything else recovered. Net is the figure credited to your bank. Employer contributions shown on the slip belong to neither total.
Why does my payslip show employer PF if I never receive it?
For transparency. It is part of what you cost the employer and it goes into your PF account, not your bank account. It should sit in a separate block from your earnings, and adding it to gross will produce a figure you never received.
How is loss of pay calculated on a salary slip?
Either monthly gross divided by the number of days in that month, or by a fixed 26 or 30 days, multiplied by days absent. Employers differ, and the policy document says which applies. LOP also reduces PF and ESI proportionately, so the total deduction is larger than the wage loss alone.
Why is my Professional Tax different from a colleague's?
Because it is a state levy, not a central one. Karnataka and Maharashtra charge ₹200 monthly with ₹300 in February; Tamil Nadu and Kerala bill half-yearly; Odisha, Chhattisgarh and Goa do not levy it on salaried employees. Maharashtra also exempts women earning up to ₹25,000 a month. The national cap is ₹2,500 a year under Article 276.
My PF deduction went up without a salary change. Why?
The EPF wage ceiling rose from ₹15,000 to ₹25,000 on 17 September 2026 under notification S.O. 5109(E). If your employer applies PF on the ceiling, your deduction moved from ₹1,800 to ₹3,000 a month, matched by the employer. Your take-home fell by ₹1,200 and ₹2,400 more a month now goes into your retirement corpus.
Are arrears taxed at a higher rate?
No, but they are taxed in the month received, on top of that month's normal salary, which raises that month's TDS sharply. The annual liability is what matters and later months usually adjust. Where arrears relate to an earlier year, relief under Section 89(1) can be claimed using Form 10E at the time of filing.
What should I check on my payslip every month?
That gross matches your agreed structure; that PF is the right percentage of the right base; that Professional Tax matches your state; that no loss of pay is shown for leave you did not take; and that net pay matches your bank credit. Two minutes, and it catches almost everything.
What if TDS on my payslip is missing from Form 26AS?
It means the tax was deducted from you but not deposited with the government, and you cannot claim credit for it. Raise it with payroll in writing immediately, with the payslips as evidence. This is the single most consequential payslip error and the easiest to miss.
Calculators
- In-hand salary calculator — what your package should be paying each month
- Salary breakup calculator — the full structure behind the payslip
- Professional Tax calculator — every state's slabs
- Income tax calculator — old and new regime side by side
- PF / EPF calculator · HRA exemption calculator
Notes and Disclaimer
Worked figures are produced by the calculators linked above for FY 2026-27 at the stated assumptions: ₹15,00,000 CTC, old tax regime, Basic at 50% of total remuneration, metro city, Karnataka Professional Tax, PF on the statutory ceiling. Provisions referred to: Section 192 (TDS on salary); Section 89(1) and Form 10E (relief on arrears); Section 2(y) and Section 14, Code on Wages, 2019 (wage definition; overtime at twice the ordinary rate); Section 16 and Section 2(88), Code on Social Security, 2020 (Provident Fund; ESI wage ceiling of ₹21,000); the EPF wage ceiling of ₹25,000 per notification S.O. 5109(E) effective 17 September 2026; Article 276 of the Constitution (Professional Tax cap).
Payslip formats, loss-of-pay formulas and declaration deadlines vary by employer, and Professional Tax varies by state. This is general guidance and not tax or payroll advice. Raise any discrepancy with your payroll team, and consult a qualified professional before acting on a tax position.
Last verified for FY 2026-27 rules: September 2026.