Professional Tax (PT)
Professional tax is a state-levied tax on employment income, deducted monthly by the employer from an employee's salary and paid to the state government.
Also known as: PT, P Tax, professional tax slab
It is levied by state rather than centrally, which is the whole of its difficulty. Some states levy it and others do not, the slabs differ, and the amount depends on the state in which the employee works — not where the company is registered and not where payroll is run.
For a single-office company this is a fixed monthly figure that nobody thinks about. For a company with employees across several states it becomes a per-employee, per-state calculation with different slabs and different filing obligations, and getting it wrong is a compliance exposure in each state separately.
The amounts are small — typically a few hundred rupees a month — which is precisely why it is neglected. The cost of an error is not the tax; it is the interest, penalty and the effort of correcting filings across states after the fact.
The operational requirement is therefore that each employee's work location is a real, maintained field rather than a free-text note, because the slab follows the location.
Statutory note
Slabs, applicability and filing frequency are set by each state and revised independently. Confirm the current slab for every state you employ people in — a rate that is right in one state is not evidence about another.
Handled in SignHR
Payroll
Payroll support & integration: salary structures, attendance-to-payroll inputs, payslip access, reimbursements, and a clean hand-off to your payroll provider.
See payrollRelated terms
EPF (Employees' Provident Fund)
EPF is India's statutory retirement savings scheme, funded by matching monthly contributions from the employee and the employer on basic salary plus dearness allowance.
ESI (Employees' State Insurance)
ESI is India's statutory health and social security scheme for employees earning below a wage threshold, funded by contributions from both the employee and the employer.
CTC (Cost to Company)
CTC is the total annual cost an employer bears for an employee — salary, allowances, employer contributions and benefits combined — not the amount the employee receives.
Multi-Location HR
Multi-location HR is running one workforce across several offices, sites or states, where holiday calendars, attendance rules and statutory obligations differ by where each employee works.