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Absenteeism: The habitual pattern of being absent from work without valid reason. High absenteeism in Bangalore’s IT sector averages 3–5% and directly impacts project delivery and payroll costs. Tracking it accurately requires a reliable attendance system.
Appraisal Cycle: A structured evaluation period — quarterly, half-yearly, or annual — where employee performance is formally reviewed against set goals. Most Bangalore companies run annual or bi-annual cycles, with quarterly check-ins gaining popularity.
Attendance Management: The system of tracking employee work hours, check-ins, leaves, and overtime. Karnataka law mandates a maximum of 9 hours/day and 48 hours/week. Modern systems use GPS, biometric, or mobile app-based tracking.

B

Basic Salary: The fixed component of an employee’s salary before any additions (HRA, allowances) or deductions (PF, PT). Typically 40–50% of CTC for Bangalore companies. PF contributions and gratuity are calculated as a percentage of basic salary.
Biometric Attendance: Attendance tracking using unique biological identifiers like fingerprints or facial recognition. Eliminates buddy punching (one employee clocking in for another) in Bangalore offices. Data must be integrated with payroll for accurate salary processing.

C

CTC Cost to Company: The total annual cost an employer spends on an employee including salary, PF contributions, insurance premiums, and other benefits. Example: ₹8,00,000 CTC may result in only ₹55,000/month take-home after all statutory deductions and tax. CTC is never what you actually receive.
Compensatory Off Comp-Off: A paid day off given to an employee who worked on a holiday or weekend. Must be availed within a specified period (usually 30–90 days) as per company policy. Failure to avail comp-off may require the employer to pay it as overtime in some cases.

D

DA Dearness Allowance: An allowance paid to employees to offset the impact of inflation on their purchasing power. Calculated as a percentage of basic salary and revised periodically by the government for public sector employees. DA is taxable and forms part of gross salary.

E

Employee Engagement: Activities and strategies to keep employees motivated, productive, and emotionally committed to the organisation. Bangalore’s competitive job market makes engagement critical for retention — disengaged employees are 3× more likely to leave within a year.
Employee Self-Service ESS: A portal where employees can access payslips, apply for leave, submit tax declarations, and raise HR queries without contacting HR directly. Reduces HR team workload by up to 60% for administrative tasks in Bangalore companies.
EPF Employee Provident Fund: A retirement savings scheme where the employee contributes 12% of basic salary and the employer matches 12%. Mandatory for all establishments with 20 or more employees. Managed by the Employees’ Provident Fund Organisation (EPFO) under the EPF & MP Act 1952.
ESI Employee State Insurance: A health and social security insurance scheme for employees earning ₹21,000/month gross or less. Employee contributes 0.75% of gross wages; employer contributes 3.25%. Covers medical treatment, sickness, maternity, disability, and dependent benefits.
Exit Interview: A structured conversation with a departing employee to understand their reasons for leaving. Helps Bangalore companies identify recurring retention issues, management problems, and compensation gaps. Data from exit interviews should inform HR policy changes.
ESOP Employee Stock Option Plan: Company shares offered to employees as part of their total compensation package. Extremely common in Bangalore’s startup ecosystem as a way to attract talent without high cash salaries. Vesting period is typically 1–4 years with a 1-year cliff.

F

Full & Final Settlement F&F: The last payment made to an employee after resignation or termination. Includes pending salary, leave encashment, gratuity (if applicable), variable pay, bonus, and applicable deductions. Under Karnataka law, F&F must be processed within 30 days of the last working day.

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Gratuity: A lump sum benefit paid to employees who have completed 5 or more years of continuous service with the same employer. Formula: (15 × last drawn monthly salary × years of service) ÷ 26. The maximum tax-exempt limit is ₹25 lakhs under the Payment of Gratuity Act 1972.
Gross Salary: Total salary before any deductions. Gross = Basic + HRA + DA + Special Allowances + Other Allowances. PF, PT, ESI, and TDS are then deducted from gross salary to arrive at the net (take-home) salary. Gross salary is used for ESI eligibility checks.

H

HRA House Rent Allowance: A salary component to help employees cover rental expenses. For Bangalore (classified as a metro city), HRA is typically 50% of basic salary. Partially tax-exempt under Section 10(13A) if the employee is actually paying rent and submits rent receipts.
HRMS Human Resource Management System: Software that automates core HR functions — payroll, attendance, recruitment, performance, and compliance — in one integrated platform. A good HRMS eliminates spreadsheets, reduces errors, and ensures statutory compliance for Bangalore businesses.
Human Capital Management HCM: A broader strategic approach to managing employees as organisational assets rather than just resources. Includes workforce planning, talent management, learning & development, and succession planning — going beyond the transactional functions of a standard HRMS.
HR Analytics: A data-driven approach to HR decision-making using metrics like attrition rate, cost-per-hire, time-to-fill, and employee engagement scores. Helps Bangalore companies identify patterns and optimise their people strategy. Often called “people analytics” in the industry.

I

Income Tax — Section 80C: Allows employees to claim deductions up to ₹1.5 lakhs/year on investments such as PPF, ELSS mutual funds, LIC premiums, and home loan principal. Employees submit Form 12BB declarations to their employer to reduce the TDS deducted monthly from salary.

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KRA Key Result Area: Specific areas of responsibility assigned to an employee against which their performance is measured during appraisals. KRAs define the scope of work, while KPIs (Key Performance Indicators) measure the metrics within each KRA. Setting clear KRAs is the foundation of any effective appraisal system.

L

Labour Welfare Fund LWF: A state-mandated contribution for employee welfare activities. In Karnataka: Employee contributes ₹20 + Employer ₹40 per half-year, paid in June and December. Often overlooked by SMBs but legally mandatory. Non-payment attracts penalties and can cause compliance issues.
Leave Encashment: Conversion of unused earned/privilege leave into a cash payment. Usually paid at the time of resignation, retirement, or at year-end as per company policy. Leave encashment received by private sector employees on resignation is partially taxable.
Leave Management: The system for tracking employee leave balances, applications, approvals, and compliance with state leave rules. Under Karnataka law, employees accrue 1 earned leave per 20 working days. Automated leave management eliminates manual tracking errors and balance disputes.

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Maternity Leave: Female employees are entitled to 26 weeks of fully paid maternity leave under the Maternity Benefit (Amendment) Act 2017. Applicable to establishments with 10 or more employees. Employers must also provide crèche facilities if they have 50 or more employees.
Minimum Wages: The minimum salary an employer must legally pay as per government notification under the Minimum Wages Act 1948. Karnataka sets different minimum wages based on industry, skill level (unskilled, semi-skilled, skilled), and zone (Bangalore metro vs other areas). Revised periodically.

N

Net Salary Take-Home: The actual amount credited to an employee’s bank account after all deductions — PF, ESI, PT, TDS, and LWF — are subtracted from gross salary. The gap between CTC and take-home can be significant; always clarify the salary structure before joining.
Notice Period: The mandatory period between an employee’s resignation and their last working day, during which they continue to work and receive salary. Typically 30–90 days in Bangalore IT companies. Can be shortened with a “notice period buy-out” where the employee pays the equivalent salary amount.

O

Onboarding: The structured process of integrating a new employee into the organisation — documentation collection, system access setup, team introductions, and policy orientation. Research shows that good onboarding can reduce early attrition by up to 25% in the first 90 days.
Overtime: Work performed beyond normal working hours (9 hrs/day or 48 hrs/week in Karnataka). Must be compensated at 2× the normal wage rate per the Karnataka Shops & Commercial Establishments Act. Overtime records must be maintained and included in monthly payroll calculations.
Offboarding: The structured process when an employee exits the organisation — covering knowledge transfer, asset return (laptop, ID card, access cards), Full & Final settlement, exit interview, and IT access revocation. A smooth offboarding protects the company and maintains the employee’s goodwill.

P

Payroll: The end-to-end process of calculating and distributing employee salaries, including all earnings, statutory deductions, taxes, and employer contributions. For Bangalore companies, payroll must account for PT, PF, ESI, LWF, and TDS every month without fail.
Payslip: A document (physical or digital) showing a complete breakdown of an employee’s salary for a specific month — all earnings, all deductions, and net pay. Employers are legally required to provide payslips to all employees. Payslips are needed for loan applications and visa processing.
Performance Management: A continuous cycle of setting goals, monitoring progress, providing feedback, conducting formal reviews, and linking results to compensation or development plans. Modern performance management moves away from annual reviews toward ongoing conversations.
Professional Tax PT: A state-level tax levied on employment income under the Karnataka Tax on Professions, Trades, Callings and Employments Act 1976. Current slab (2025–26): ₹200/month for gross salary ≥ ₹25,000 (₹300 in February). Annual maximum: ₹2,500. Must be filed via the e-PRERANA portal by the 20th of each month.

R

Recruitment: The end-to-end process of finding, attracting, screening, and hiring qualified candidates for open positions. Bangalore’s tech hiring market averages 45 days time-to-hire for engineering roles. An Applicant Tracking System (ATS) dramatically reduces this timeline.
Reimbursement: Repayment to employees for legitimate business expenses paid from personal funds — travel, client meals, internet, mobile bills, or medical expenses. Usually processed through the monthly payroll cycle. Reimbursements up to specified limits are tax-exempt under certain salary components.

S

Salary Structure: The detailed breakup of an employee’s total compensation into individual components — Basic, HRA, DA, Special Allowance, PF, Gratuity, Insurance, and Variable Pay. Each component has a different tax treatment, so the structure significantly affects take-home salary even at the same CTC.
Shift Management: Planning and scheduling employee work shifts — morning, evening, night, and rotational. Critical for Bangalore IT companies and BPOs operating 24×7. Proper shift management ensures legal compliance, adequate staffing, and fair distribution of night shifts.
Statutory Compliance: Adherence to all government-mandated labour laws and regulations — PF, ESI, PT, LWF, Gratuity, Minimum Wages, Shops & Establishments Act registration. Non-compliance in Bangalore can result in fines, penalties, and even criminal liability for company directors.
Superannuation: An employer-contributed retirement benefit fund, typically 15% of basic salary per year. Less common in Bangalore startups today, having been largely replaced by the National Pension System (NPS). Contributions to an approved superannuation fund are tax-deductible for the employer.

T

TDS Tax Deducted at Source: Income tax deducted by the employer directly from an employee’s salary each month before payment. The amount is based on the employee’s applicable tax slab and declared investments. Employers must deposit TDS with the government and issue Form 16 annually.
Take-Home Salary: See Net Salary above. The actual monthly amount credited to the employee’s bank account after all mandatory and voluntary deductions are applied to gross salary. Always verify the take-home before accepting a job offer.
Timesheet: A record of hours worked by an employee on specific projects, tasks, or client accounts. Essential for Bangalore IT services and consulting companies that bill clients on a time & material basis. Timesheet data feeds directly into project costing and utilisation reports.

V

Variable Pay: A performance-linked salary component that varies based on individual, team, or company performance against set targets. Common in Bangalore IT sector — typically 10–20% of CTC for engineering roles and up to 40% for sales positions. Must be clearly defined in the offer letter.

W

Work From Home WFH: Company guidelines governing remote work arrangements — eligibility criteria, attendance tracking methods, communication protocols, equipment reimbursement, and data security requirements. Has become standard policy in Bangalore’s post-COVID IT sector, with hybrid models (2–3 days office) now most common.

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