Question

Basic Pay, Dearness Allowance, House Rent allowance, Professional Tax, Provident fund contribution are given to prepare the Pay Roll statement. Give the equation to calculate Net Salary. 

• Gross salary = Basic Pay + Dearness Allowance + House Rent Allowance 
• Total Deduction = Professional Tax + Provident fund contribution
• Net Salary = Gross Salary – Total Deduction

Answer 1

Net Salary Calculation: 

Step 1 – Calculate Gross salary by using the given formula. 

Gross salary /Gross Pay = Basic Pay + Grade Pay + Dearness Pay+ Dearness Allowance + House Rent Allowance + Any other Earnings. 

Step 2 – Calculate Total Deduction by using the following formula. 

Total Deduction = Professional Tax+ Provident Fund + Tax deducted at source + Loan Recovery + Any other deductions 

Step 3- Calculate net salary by the given formula. 

Net Salary = Gross salary – Total Deduction