Salary Slip Format

Payslip Format

An employee salary slip is a document provided by the employer to his or her employee upon receiving income every month and includes details of the salary breakdown like basic salary, medical allowance, conveyance allowance, and deductions. The format of salary slips differs from company to company but here’s a basic salary slip template that usually includes the following information:

1. Company name, address

2. Salary slip date

3. Employee name, code, designation, and department

4. Employee PAN/Aadhaar number, bank name, and account number

5. EPF account number and UAN (Universal Account Number)

6. The total number of days worked and the number of leaves taken

7. Details of income earned and list of deductions

8. Net pay and gross pay in numbers and words

Salary Slip Sample Format

Employees can be provided with a salary slip format in word or a salary slip format online and includes basic information like company name, employee name, designation, employee code, etc. Before we jump to the various components of a salary slip, let's take a look at a simple salary slip format

Components of a Salary Slip

The two essential components of a salary slip are earnings and deductions. Let's take a look at each one in detail:

1. Earnings

• Basic Salary

This is the most important component of the employee salary slip and is usually calculated prior to adding any extras or deductions like overtime, bonuses, or any other compensation received from the company.

• Dearness Allowance

This allowance is usually a fixed percentage of the basic pay offered by the employer to compensate an employee for any increase in the cost of living. It is available only to Government employees and has to be declared at the time of filing the income tax returns.

• House rent Allowance

This is one of the essential pay slip components that are generally 40-50% of the basic pay paid to an employee. A person who lives in rented housing receives this type of assistance with the goal of making their housing expenses more manageable

• Conveyance Allowance

Also known as transport allowance, the conveyance allowance is a pay slip component given to the employees of a company for the travel from their residence to the workplace

• Special Allowance

This is a special performance-based allowance paid to an employee for the performance of a duty mentioned under section 14(i) and is partially taxable. Incentives like these are provided to motivate employees and encourage them to do well.

2. Deductions

• Professional Tax

The professional tax is a pay slip component that varies between ₹200 and ₹2,500 depending on the monthly salary. It is a fee imposed by the state government to allow an individual to practice a particular profession.

• Tax Deducted at Source (TDS)

TDS is a certain amount charged to an employee on behalf of the Income-tax department when a salary or income is earned. The employee can save this deduction by investing in tax-saving schemes that must be disclosed at the start of the financial year.

• Employee Provident Fund (EPF)

This pay slip component is a necessary deduction that provides a monetary benefit to all employees post their retirement. For this, both the employer and the employee must contribute 12% of the basic remuneration into the EPF account.

Standard Deduction on Salary Slip

The standard deduction for salaried employees is a flat ₹50,000 from total income under the net salary and has replaced transport allowance and medical allowance as pay slip components. The primary objective of the standard deduction is to reduce unnecessary paperwork and benefit employees from income tax deductions. Another point to note is that it is usually deducted from the gross salary and can be claimed as an exemption irrespective of any proof of investment.

Difference between Cost to Company (CTC) and Gross Salary

The fundamental difference between CTC and gross salary lies in the salary structure of a company. CTC is the overall amount that an employer spends on hiring and reimbursing for an employee’s services in a given year. It includes all the allowances and deductions on the salary of an employee. The gross salary, on the other hand, is the salary that an employee gets before any deductions like EPF and gratuity is applied

Taxable/Non-Taxable Components of a Salary Slip

Here is a quick look at all the taxability details on the components of salary slip: