What is Salary Slip or Payslip?
A salary slip is a document, which is provided by the HR of the company to its employees every month. It is shared with the employees via email or hard copy. The employees can download the salary slip format PDF format as well.
However, many small organizations don’t give a payslip to their employees. In that case, employees can ask to issue a salary certification.
The salary slip format works as an income proof that states that an organization has released its employees’ salary. This piece of the document contains detailed information about the employee salary.
Basically, it’s a legal proof of the income of an employee. Furthermore, the payslip format also acts as proof of employment that helps you in switching jobs.
Why is an Understanding of a Payment Slip Format Important?
A payment slip, salary slip or payslip is a legal proof of income for an employee. It gives a clear idea about how much they will get in hand, and how much money gets deducted from their CTC. Furthermore, a salary slip format in India is also used as employment proof. It helps you in filing income tax return, purchasing investment policies and job switching.
An understanding of a salary slip format in India is important because-
- Choose Smartly: A salary slip helps you in choosing jobs smartly. You can compare the allowances of the new company with your previous company with the help of a payslip.
- Tax Planning: A salary slip format can help you to the advantages of tax deduction.
- Better Understanding: A salary slip format gives you a basic understanding of ESI and EPF.
Salary Slip Format in India
Salary slip is available in various formats depending on the employer. The employees can download the salary slip format in word, excel and pdf.
The salary slip format in India include the following components:
- Deduction Amount.
- Company name, logo and address.
- Net Pay.
- Gross Pay.
- A total number of working days.
- Employee IDs.
- Code of Organization.
- ESI Number.
- PF Number.
- Universal Account Number.
- Total work days, effective workdays and a total number of leaves.
- Aadhar card details of the employee.
- Signature and stamp of the company.
These are the common components available in the payslip format. After downloading the salary slip format in word, pdf or excel, clearly check every component precisely. And if you find anything wrong, you can edit it as per your understanding and convert into any payslip format.
Salary Slip/Payslip Sample
Download Salary Slip Format in Excel, Word, PDF and Doc
1. Salary Slip Format in Excel
2. Salary Slip Format in Word
3. Salary Slip Format in PDF
4. Salary Slip Format in Doc
Who Gets a Salary Slip or Payslip?
A person who works for a company as a full-time employee will get a salary slip or payslip. It helps him to understand how much money he is taking at home and how much is going in the taxes.
Benefits of a Salary Slip
The following are the top benefits of a salary slip format India:
1. Managing Finances
Many small companies struggling in keeping command on cash flow. If you are also experiencing the same struggle, then the payslip format helps you to better to keep track of an income.
2. Tracking Employees
Top companies have happy employees. So, if you want to know whether your employees are happy or not with the pay you are offering them, then payment slip could be of great help to you.
3. Keeping Transparency
A salary slip format helps you in keeping a great amount of transparency between you and your employees. When you give everything on paper, whether it is a project manual or salary details, it reduces ambiguity and increases transparency in the business.
When an employee of your company gives a resignation from your company, a salary slip format helps you and your employee to show valid proof that you both have a professional bond with each other.
What are the Components of a Salary Slip/Payslip?
To give you a better understanding of a salary slip format, we have briefly described the components of a salary slip.
The components that part of earning side in the salary slip excel format:
1. Basic Salary
It’s an essential component because it used to determine the other components of the payment slip format. The basic salary is usually fixed at 30-40% of the in-hand salary.
2. Dearness Allowances (DA)
Another important component of the salary slip format in India is allowances. These are benefits provided to the employees from the company side.
Basically, it is the amount of money which is given to the employees to meet their personal expenses.
3. Convenience Allowances
It is also known as the travel allowances. It is given to the employees to compensate for the expenses on travelling (home to office), and other work-related traveling trips. It is mentioned in the salary slip format below the basic salary.
4. House Rent Allowances
It is a part of your basic salary which is given to the employees to meet with the accommodation expenses. It is exempted from the Income-tax act. When you download the salary slip format excel pdf, you can edit the allowances section as per your requirements.
5. Medical Allowances
Many companies offer health insurance plans to their employees which comes under the medical allowances. It is completely taxable. The health insurance premium is also mentioned in the pay slip format.
6. Performance Allowances
It comes under the incentive, appraisal and bonus given to the employees to recognize their hard work.
Salary Slip Deductions
A payslip format is divided into two sections: earring side and the deduction side. Above we have mentioned the earning side, now we are going to tell you what comes under the deduction in a pay slip format.
The following are the components that can deduct from your monthly salary:
1. Tax Deducted at Source (TDS)
On behalf of the Income Tax Department of India, a certain amount will be deducted from your income every month. You can find the TDS amount in the salary slip excel format. You can also reduce the tax by investing in the tax-reduction schemes.
2. Employees Provident Fund (EPF)
It is a compulsory contribution which deducts from your salary. And the EPF amount is also mentioned in the salary slip format PDF. Employees contribution towards EPF is tax exempted under the income tax act section 800 C.
3. Professional Tax
It is a minimal amount which gets deducted from the employees’ income and paid to the Indian Government. You can find the amount in the payment slip format as well.
4. Tax Slab and Deduction Defined by State Government
A payment slip format is an important document which gives a clear idea about earning and deduction. Many companies don’t provide payslip format in excel, in that case, you can ask them to provide you with a salary certification which works as an income proof.
Why is Salary Slip Important?
In the professional sphere, whether it is a project manual. Leave request or a salary slip format everything must be professionally represented in a documented format. A salary slip is proof of income that employees received from the employer every month.
1. Helps in Planning Income Tax Return
A salary slip format helps you in calculating and preparing income tax returns. It gives you a clear idea of how much tax you should pay or claim every year.
2. Proof of Employment
A salary slip format in word works as legal proof of employment. Whenever you opt for the investment policies, loans and job switching a salary slip, verify employment and the source of the income.
3. Help in Borrowing
No lender gives you a loan without verifying your income proof. To assure a lender that you are a full-time earner you can give your salary slip format in excel pdf. A salary slip can make your loan procedure hassle-free. Almost every financial institution requires a pay slip format before sanctioning a loan.
4. Salary Negotiation
To get a better salary package and allowances from the other company, you can show your salary slip format. It gives a full-proof that you had been getting the benefits, allowances and salary in your previous company.
Also, you can compare the offers given by the new company. And if everything you are receiving better from the previous company then you can consider a new company. All in all, a salary slip format India helps you in evaluating good job opportunities.
How does a Salary Slip Help to Save Income Tax?
A salary slip format consists of several components like basic salary, travel allowances, house allowances, deduction, etc. that can help you to save the tax every financial year. On the other side, the tax authorities allow companies to create a structure of salary slip format in such a way that enables employees to save the tax via allowances provided by the company.
When it comes to an understanding of salary, showing employment proof, maintaining a cash flow of the company, a salary slip format word plays an important role. This format shows how much an employee earns in a month and how much income tax he/she is giving every financial year.
A payslip format plays a significant role at the time of job change and borrowing money from financial institutions. A salary slip format is important not only for employees but for the employers also.