Indian employers must deduct PF at 12% of PF wages, ESI at 0.75% of ESI gross wages for eligible employees, and Professional Tax as per the state-specific monthly slab. TDS on salary is also deducted under Section 192. Zoho Payroll automates all four, calculates them each month, and generates the required challan and return data.
Beyond statutory deductions, Zoho Payroll supports employee loan repayments and advance salary recoveries as deduction components. When a loan is disbursed through the system, the EMI amount is automatically added as a deduction in each subsequent pay run until the loan is fully recovered.
Net Salary = Gross Salary minus all active deduction components for the period. Zoho Payroll applies deductions in a defined order: statutory first, then voluntary. The payslip shows each deduction line separately, giving employees full visibility into their take-home calculation.
A deduction component is a pay element that reduces an employee’s net salary. Zoho Payroll supports both statutory deductions (PF, ESI, PT, TDS) configured automatically based on Indian rules, and voluntary deductions such as loan repayments that are set up per employee.
Yes. Under Settings > Salary Components, you can create a custom deduction component with a fixed amount or formula calculation. Once created, it can be added to any salary structure and applied to individual employees as needed.
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