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15 Jul 2021

What is a Pay Slip?

A pay slip or a salary slip is a written record of the payment an employee receives for the services rendered to an organisation. Usually provided every month, an employee pay slip lists out the details related to one’s employment status along with components of the salary. It is important to note that salary slips are a part of both private and government organisations.

Who Gets a Salary Slip?

As the name suggests, a salary slip is only available to salaried employees. The responsibility for providing the salary pay slip to the employee rests with the employer. They can either choose to hand over the monthly salary slip as a hard copy or make the same available on a dedicated salary slip portal. If for some reason you are not provided with a monthly salary pay slip, you can also request a salary certificate that will list out the month-wise employee pay slip details

What are E-Payslips?

In the current technologically advanced times, most employers prefer to make the pay slips available online. This digital, online pay slip is known as an e-payslip. You can easily view and download salary slip by logging into your organisation’s salary portal.

Importance of Salary Slip

If you study the pay slip format, you will find that there are many components listed on it. Downloading and understanding each of these components can prove to be very helpful. Listed below are some of the uses of a salary slip.

  • Maximise Income Tax Savings

Thorough knowledge of the basic pay, house rent allowance, tax deductions, etc., can help you with your income tax planning so that you can maximise savings. For example, under Section 10 of the Income Tax Act, 1961, if you live in rented accommodation, you can claim a part of the House Rent Allowance (HRA) under tax deduction. Also, under Section 80C of the same Act, you can enjoy tax savings against EPF (Employees’ Provident Fund) contribution, which makes up to 12 percent of your basic salary.

  • To Apply for a Credit Card

You need the monthly salary payment slip even when you apply for a credit card. This is irrespective of whether you have chosen to opt for an RBL Bank credit card, Axis Bank credit card, SBI credit card, ICICI Credit Card or Citibank Credit Card, the salary slip is mandatory if you are a salaried individual. The document serves as proof of your regularised income and backs your eligibility for the selected credit card.

  • Prove Employment Status

Your payslip is legal proof of your employment status. If you are looking to get a loan, open a bank account, apply for a visa, etc., you would need to submit copies of your salary slips for the last three months as proof of your last drawn salary.

  • Resolve Discrepancies in Salary Payment

If you see a change (increase/ decrease) in your monthly salary amount, you can refer to your pay slip and check the deductions. In case of discrepancies, you can use the pay slip as proof and raise the issue with the finance team of your organisation.

  • For Switching Jobs

When you are looking to seek employment in a different organisation, you would need to provide your salary slip to the employer to initiate salary negotiations. This is because your new salary is decided based on your current salary.

  • Increase Eligibility for Availing Loans

In case you wish to apply for a loan, an important criterion that you need to fulfil is your financial eligibility to repay the loan. Your salary slip provides proof of your monthly income and is accepted as an official proof of your employment. It is accepted by almost all the banks and financial institutions as a proof of your financial eligibility and increases your chances of getting the loan approved.

  • Gauge your Credit Limit

Banks and other financial institutions often take the help of your salary slip, along with the other income proof provided by you, in order to set your credit card limit. A salary slip also helps them determine your loan repayment capacity. Banks often analyse your salary slips to determine the total loan amount you are eligible for.

  • Government Subsidies

In certain cases, by submitting your salary slips, you can avail several government subsidies for food, medical care, and other facilities.

FAQs About Pay Slip

  • ✔️What is a Pay Slip?

    A pay slip is a written record of the monthly salary payment. Only salaried individuals have access to a salary slip, which is provided by the employer. Along with the amount received as a salary, an employee pay slip lists out several critical details related to one’s employment status such as designation, tenure of employment, etc.

  • ✔️How do I find my payslip?

    At the end of every month, your employer will either hand over the pay slip to you as a hard copy or upload it on the salary slip portal. In case it is available online, you can log in to the portal and download the e-pay slip for the particular month.

  • ✔️How can I check my salary slip online?

    To check your salary slip online, you can visit your organisation’s salary slip portal and login with your credentials. Once logged in, you can view and download the salary slip from the side menu or dashboard.

  • ✔️Where is the salary slip required?

    If you are a salaried individual, you would need a salary slip to apply for a new credit card, open a bank account, request for a loan, save on your income taxes, resolve payment discrepancies, switch jobs, etc.