📚 HR Glossary India | HR Terms Explained
HR Glossary A–Z
The definitive HR and payroll terminology guide for Indian businesses — covering compliance terms, HR processes, and Telangana-specific regulations.
A
Absenteeism
The habitual pattern of absence from an employee's duty or obligation without good reason. Measured as a percentage of total workdays.
Annual Leave (AL)
Also called Earned Leave or Privilege Leave in India. Accrued leave that employees earn based on days worked, typically 1 day per 20 days worked under the Factories Act.
Attrition Rate
The percentage of employees who leave a company over a given period, typically calculated annually. Formula: (Employees who left / Average headcount) × 100.
ATS (Applicant Tracking System)
Software that manages the recruitment process — from job posting to candidate hiring — by tracking applicants through each stage of the hiring pipeline.
B
Basic Salary
The fixed component of an employee's compensation before any allowances, bonuses, or deductions. PF and Gratuity are typically calculated as a percentage of Basic Salary in India.
Biometric Attendance
An attendance system that uses unique biological characteristics (fingerprint, face recognition, iris scan) to verify employee identity at clock-in/out.
Bonus
Additional compensation given to employees beyond their regular salary. In India, the Payment of Bonus Act 1965 mandates a minimum annual bonus of 8.33% of salary for eligible employees.
C
CTC (Cost to Company)
The total annual cost an employer incurs for an employee, including salary, employer PF contribution, gratuity provision, insurance, and other benefits.
Casual Leave (CL)
Short-duration leave for personal or family needs, typically 7–12 days per year. Usually non-accruable and non-encashable.
Comp-off (Compensatory Off)
Additional day(s) off granted to an employee who worked on a holiday or exceeded regular working hours.
Compliance
Adherence to labour laws, tax regulations, and statutory requirements — including PF, ESI, PT, TDS, and the Shops & Establishments Act in Telangana.
D
DA (Dearness Allowance)
An allowance paid to employees to offset the impact of inflation. Common in government and PSU organisations. Revised periodically based on Consumer Price Index.
Deduction
Amounts withheld from an employee's gross salary — including PF, ESI, Professional Tax, TDS, loan EMIs, and advance salary recoveries.
E
ECR (Electronic Challan cum Return)
The electronic file format used for submitting PF contributions to the EPFO (Employees' Provident Fund Organisation) portal.
ESI (Employees' State Insurance)
A social security scheme managed by ESIC. Employees earning up to ₹21,000/month contribute 0.75% of wages; employers contribute 3.25%.
EPF (Employees' Provident Fund)
A mandatory savings scheme under the EPF Act 1952. Both employer and employee contribute 12% of basic salary to the employee's PF account.
F
Form 16
The TDS certificate issued by employers to employees under Section 203 of the Income Tax Act. Employees use it to file their annual income tax return.
F&F Settlement (Full and Final)
The final payment made to an employee upon separation, including pending salary, earned leave encashment, gratuity, and bonus.
G
Geo-Fencing
A GPS-based virtual perimeter set around a physical location. Employees can only mark attendance when within the defined geo-fence — used for field staff and WFH verification.
Gratuity
A lump-sum payment made to employees who have completed 5+ years of continuous service, under the Payment of Gratuity Act 1972. Formula: (Basic + DA × 15/26) × years of service.
H
HRA (House Rent Allowance)
An allowance provided to employees to cover rental expenses. HRA is partially or fully exempt from income tax under Section 10(13A), subject to conditions.
HR Helpdesk
An internal ticketing system where employees raise queries or requests to the HR department — payslip disputes, policy clarifications, IT issues, etc.
I
Increment
An increase in an employee's salary, typically annual, based on performance rating, market benchmarks, and company profitability.
IT Declaration (Form 12BB)
A form submitted by employees to their employer declaring tax-saving investments (80C, 80D), HRA claims, LTA, and home loan interest for TDS calculation purposes.
L
LOP (Loss of Pay)
Salary deduction for leave taken beyond the approved leave balance. LOP days are excluded from PF and Gratuity calculations.
LTA (Leave Travel Allowance)
Tax-exempt allowance for travel expenses incurred during leave. Exempt under Section 10(5) for domestic travel, twice in a block of 4 years.
LWF (Labour Welfare Fund)
A statutory contribution made by employers and employees to the state Labour Welfare Fund Board. Rates and due dates vary by state; Telangana has its own LWF Act.
O
OKR (Objectives and Key Results)
A goal-setting framework where Objectives define what to achieve and Key Results define measurable milestones. Popularised by Google and widely used in Hyderabad tech companies.
Onboarding
The process of integrating a new employee into the organisation — including documentation, IT setup, policy orientation, and team introductions.
Overtime (OT)
Work done beyond normal working hours. Under the Factories Act, overtime is paid at twice the ordinary rate. Maximum 50 hours overtime per quarter.
P
PT (Professional Tax)
A state-level tax on employment income levied by states including Telangana. Employers deduct PT from employee salaries monthly based on income slabs and remit to the state government.
Payslip
A document issued to employees each pay period showing gross earnings, deductions (PF, ESI, PT, TDS), and net take-home salary.
PIP (Performance Improvement Plan)
A formal document that outlines specific areas where an employee's performance needs to improve, with measurable targets and a defined timeline.
R
Recruitment Pipeline
The series of stages a job candidate moves through — Application → Screening → Interview → Offer → Onboarding.
Reimbursements
Expenses incurred by employees for business purposes that are repaid by the employer — fuel, mobile bills, medical expenses, client entertainment.
S
Shift Roster
A schedule that assigns employees to specific work shifts (Morning, Afternoon, Night) across days and weeks.
Statutory Compliance
The mandatory legal requirements businesses must meet under Indian labour laws — EPF, ESI, PT, Gratuity, Bonus, Factories Act, Shops & Establishments Act.
T
TDS (Tax Deducted at Source)
Income tax deducted by employers from employee salaries at source, under Section 192 of the Income Tax Act, and deposited with the government on behalf of employees.
Time and Attendance
The system used to track employee working hours, clock-in/out times, overtime, and absenteeism.
U
UAN (Universal Account Number)
A 12-digit unique number assigned to each EPF member by EPFO. UAN remains the same across all employers throughout an employee's career.