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How do I set up payroll and salary structures?

Set your payroll rules once, then give each employee an annual CTC — ASHR builds a compliant salary breakup automatically.

~4 min read · For admin · Updated 6/12/2026

Quick answer

Payroll works in two steps. First, set your rules once in Payroll → Settings (how a CTC splits into Basic, HRA and statutory items). Then give each employee an annual CTC and ASHR builds a compliant monthly breakup — Basic, HRA, PF, ESI, Professional Tax, gratuity and net pay — automatically.

What is a salary structure?

A salary isn't one number — it's a breakup. An employee's CTC (Cost to Company) is split into:

  • Earnings — Basic, House Rent Allowance (HRA), Conveyance, Special Allowance. These add up to the gross salary.
  • Deductions — the employee's share of Provident Fund (PF), ESI (for lower wages), Professional Tax (PT) and income tax (TDS). Gross minus deductions is the net pay (in-hand).
  • Employer contributions — employer PF, employer ESI and a gratuity provision. These are part of the CTC but are a company cost, not deducted from the employee.

Step 1 — Set your rules (Settings)

Open Payroll → Settings. India statutory rates are pre-filled, so most organisations can leave them as-is:

  • Basic % of CTC — by law (Code on Wages) Basic must be at least 50% of CTC. ASHR won't let you save below that.
  • HRA % of Basic — commonly 50%.
  • PF — 12% of Basic, with an optional ₹15,000 wage ceiling.
  • ESI — applies only to employees earning up to ₹21,000/month.
  • Professional Tax — a flat monthly amount (per-state slabs come in a later release).
  • Gratuity — an employer-side provision (4.81% of Basic).

Step 2 — Give each employee a CTC

On the Payroll page you'll see every active employee. Click Set up (or Edit), enter the annual CTC and an effective date, and the breakup preview updates instantly. When it looks right, click Save.

Increments and history

When someone gets a raise, open their structure, enter the new CTC, add a note like "Apr 2026 increment" and save. This creates a new revision and marks the previous one as superseded — the full history is kept, so past compensation is never lost.

Who can see this?

Salary is the most sensitive data in ASHR. Only HR Admins and Super Admins can open Payroll. Employees and managers cannot see anyone's salary here.

What's coming next

This is the compensation foundation. Running monthly payroll, generating payslips, and exporting bank files and PF/ESI/PT/TDS reports arrive in the next phases.