Payroll for Hospitals: Salary Structure, Allowances and ESI

Hospital payroll pulls in more monthly inputs than most. Salaries for nurses, technicians and support staff depend on finalized attendance, night duties, overtime, on-call nights and holiday work, while visiting consultants on professional fees are paid separately. A good hospital payroll fixes the salary structure once, collects variable inputs by a set date and pays everyone by the 7th of the following month, with payslips that show PF, ESI and professional tax clearly.

Salary structure for hospital staff

Many hospitals pay nurses and support staff a monthly gross split into basic, DA, HRA and a special allowance, with a nursing or ICU allowance for specialty units. Under the Code on Wages, basic pay plus DA must be at least half of total remuneration, and allowances above that line are added back to wages, which raises the PF, gratuity and bonus base. Structures that kept basic at 30 percent to hold down PF need reworking; see the 50 percent wage rule. Consultants on the salary roll use the same structure, while visiting consultants who bill a professional fee are paid through accounts, not salary payroll.

Variable inputs to collect every month

ZeniaHR's Direct Payroll takes monthly inputs as earnings (overtime, incentive, bonus, arrears, reimbursement, encashment) and deductions (fine, advance recovery, adjustment). Approved overtime arrives on its own. Night duty and on-call allowances are counted from the roster and attendance reports and entered as incentive inputs, so agree an input cut-off with the nursing office, such as the 2nd of the month. Keep every recovery within the permitted deductions.

Approved overtime and double duties
Night duty count from the roster, paid as an allowance
On-call nights for RMOs and technicians
Holiday duty that was not taken as comp-off
Arrears after increments or grade changes
Reimbursements, such as registration renewal fees
Recoveries for hostel rent, canteen and salary advances

Worked example: a staff nurse's month

Sunita's monthly gross is ₹30,000: basic and DA of ₹15,000, HRA of ₹6,000 and a special allowance of ₹9,000, so basic plus DA is exactly half. The hospital pays on a fixed 30-day basis, so a day is worth ₹1,000. In July she has 1 day of leave without pay, 8 night duties at an allowance of ₹150 each, and 4 approved overtime hours. Loss of pay is ₹1,000. Night allowance is ₹1,200. Overtime is ₹1,000 divided by 8, times 4 hours, times 2, which is ₹1,000. Her gross for the month is ₹30,000 less ₹1,000 plus ₹1,200 plus ₹1,000, or ₹31,200, before employee PF and professional tax.

A month-end calendar that meets the 7th

Monthly wages must be paid by the 7th of the following month, and when an employee leaves for any reason, wages are due within two working days; see the payment timelines. A workable hospital calendar: the nursing office clears corrections and overtime by the 1st, HR closes attendance on the 2nd, a draft run is ready on the 3rd, finance reviews on the 4th, and the run is finalized and the payment batch approved on the 5th. Finalized runs are sealed and read-only, so late changes go into the next month as arrears or adjustments. Income tax on salaries is worked out outside ZeniaHR, since Direct Payroll does not compute TDS.

How to set it up in ZeniaHR

Enter each employee's monthly gross, then fix the company's Basic and HRA split so that basic plus DA never falls under half of total pay.
Choose the loss of pay basis in the Deduction policy, for example calendar days or a fixed 30 days, and decide whether weekly offs and holidays are paid.
Agree a monthly input cut-off, then enter night duty and on-call allowances as incentive inputs and recoveries as deductions.
Close the attendance month first, so paid days come from finalized attendance and are bounded by joining and exit dates.
Run a draft, review department totals with finance, finalize the run and approve the payment batch before the 7th.
Release payslip PDFs through My Self-Service and the mobile app, and use the PF and ESI reports for monthly filings.

Roles this applies to

Resident Medical Officer Medical Officer Casualty Medical Officer Junior Resident Doctor Dental Surgeon

See payroll for hospitals and clinics in a demo

We set up your locations, shifts and rules on a video call and show it running for your team. Free for your first 50 employees.

Book a free demo See pricing

Frequently asked questions

What is the salary structure for nurses in private hospitals?

Many hospitals divide a nurse's monthly gross into basic pay, DA, HRA and a special allowance, sometimes adding a nursing or ICU allowance. Under the Code on Wages, basic plus DA must be at least half of total remuneration, which affects PF, gratuity and bonus. Night duty, overtime and holiday work are paid as monthly variable earnings on top.

When must a hospital pay salaries?

Salaries for a month are due by the 7th of the next month. A leaver's wages are due sooner, within two working days of leaving, whatever the reason for the exit. For a hospital this means attendance must close by the 2nd or 3rd, and night duty, overtime and other variable inputs have to be in by then.

Are hospital support staff covered by ESI?

Staff whose wages fall within the ESI wage limit are covered, and many GDAs, ward attendants and housekeeping staff are in that band. Check the current limit and rules on the ESI applicability page. In ZeniaHR, Direct Payroll deducts employee ESI, adds employer ESI and provides ESI reports for filing.

Can a hospital pay visiting consultants through payroll?

Consultants on the salary roll are paid through payroll like other employees. Visiting consultants who bill a professional fee are usually paid through accounts against their bills, with tax deducted as applicable, so keep them out of salary payroll and out of the attendance rules.