Salary slip, payslip sample

Salary Slip: Components, Importance Download Salary Slip Format in Excel, Word

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A Payslip is such an important document that it is required to be produced for availing benefits and separation payments to an appropriate recipient after an employee is deceased.

What is Salary Slip or Payslip?

A salary slip or Payslip is a document issued by an organization to its employee that comprises a list of his various salary components Basic Salary, HRA, LTA, Bouns, TA, DA, exemptions, taxes and deductions etc as well as specific details of employment.

A salary slip/payslip is very vital since it is the legal proof of the salary payments and deductions. You are required to show your salary slip whenever you are applying for loans, credit card, or for paying income tax amount every financial year, etc.

Salary Slip Format in India

A salary slip format includes the following:

  • Company name, logo and address
  • Salary slip month and year, Employee Code
  • Employee PAN Card/Aadhar Card, Bank account details
  • EPF Account Number, Universal Account Number (UAN)
  • Total work days, effective workdays, number of leaves taken
  • List of payments and deductions
  • Gross pay and Net pay in numbers and words

Download Salary Slip/Payslip Sample 

employee salary slip format, payslip

 

Download Salary Slip Format In Excel, Word, PDF here

Salary Slip Format in Excel:

Download Salary Slip in Excel Format

Salary Slip Format in Word:

Download Salary Slip in Word Format

Salary Slip Format in PDF:

Download Salary Slip in PDF Format

Salary Slip Format in Doc:

Download Salary Slip in Doc Format 1

Note: Once you download the salary slip format (word/excel/pdf), you will be able to edit it as per your requirements. However, it must be noted that editing could be done only in word and excel formats.

Who gets a Salary Slip or Payslip?

A salary slip is provided by an organization to its employees each month. It is shared with the employees in either mail or paper format. A salary slip is provided by an organization to its employees each month. However, there are some smaller organizations that may not provide their employees with salary slips each month. In such circumstances, you should ask your organization to issue you a salary certificate.

Importance of a Salary Slip

1. Helps in planning income tax payments

A salary slip lays down the foundation for calculating income tax. It helps in preparing income tax returns and in determining how much tax the employee should pay or how much refund he/she can claim by every financial year.

2. Proof of employment

Salary slip serves as legal proof of employment. If you are applying for visas to travel abroad or seeking admission for executive programs at numerous universities, you might be asked to provide copies of your salary slip as proof of your employment and designation.

3. To apply for loans/credit card

Salary slip comprises details of your monthly income that determines your capacity to meet your debt liabilities. Hence, your salary slip is essential while applying for loans, credit cards, and other borrowings.

4. Helps in assessing job offers

Employees can compare job offers coming from new organizations depending upon their previous salary slips. It enables them to negotiate salaries with new organizations or for new job roles.

5. Gives access to several facilities

A salary slip permits employees to access several subsidized facilities that are provided by the government of India like health care, food grains at subsidized rates, etc.

How does Salary Slip help to Save Income Tax?

A salary slip contains several components like House Rent Allowance (HRA), Dearness Allowance (DA), Medical Allowance, etc. that can enable an employee to save income tax every financial year.

On the other hand, the tax authorities enable organizations to structure salaries of their employees in such a way that enables them to save tax via several allowances that are included in their income.

Check here Best Tax saving ELSS Mutual funds to save Income Tax in 2020

Benefits of A Salary Slip

  • Salary slip shows the employer the actual cash he/she will get in their hand so that they can get an idea about how much income tax they are required to pay every financial year.
  • With the help of a salary slip, the employee can find out how much he/she is contributing towards the employee’s provident fund.
  • A salary slip is an important factor in determining the employee’s loan repayment capacity and thus determines the loan amount he/she can get.
  • Salary slip is a significant factor when you change jobs or apply for executive programs in any university. Universities and new employers seek salary slips to verify your salary claims.

Important Components of a Salary Slip/Pay Slip

1. Basic Salary

The basic salary is an important part of your salary slip as it comprises 35% to 50% of your salary. Mostly, several salary components are calculated as the percentage of your basic pay. Thus, organizations try to keep the basic pay lower so that they do not have to pay high allowances. Basic Pay is low for senior-level and higher for junior-level employees.

Some features of Basic Pay are:

a) It is fully taxable

b) It is a part of the in-hand salary

c) If your basic pay is high, your tax amount will be higher. Basic salary will decide your House Rent Allowance (HRA), Dearness Allowance (DA) and Employee Provident Fund (EPF)

2. Dearness Allowance (DA)

DA is calculated as a percentage of your basic salary and intends to provide cover against the impact of inflation. It is directly related to the cost of living and differs among employees, depending upon their locality.

Some features of DA are:

a) Dearness allowance is fully taxable for salaried employees

b) It is a part of the in-hand salary

3. House Rent Allowance (HRA)

 It is an allowance that helps the employee to pay rent if he/she is living in a rented house. If the employee is living in the metro cities then the HRA will be equal to 50% of the basic salary, and for the small cities or towns it will be 40% of the basic salary.

Some features of HRA are:

a) HRA is exempted from tax up to a certain limit, provided you are paying rent. The exemption amount is calculated as the minimum of:

  • Rent paid annually (-) 10% of basic pay (+) DA
  •  50% of (Basic + DA) in case the location is in metro cities like Delhi NCR, Mumbai, Bengaluru or Kolkata, and 40% of (Basic + DA) in case of small cities like Mysore, Nagpur, Durgapur, etc.

b) It is a part of the in-hand salary

4.  Conveyance Allowance

 It is the amount of money that the employer gives to an employee to travel from home to work and vice versa. It is exempted from tax up to a particular limit.

Some features of Conveyance Allowance are:

a) The exemption amount is calculated as the minimum of:

  •  Rs 16,00 per month and 19200 per year.
  •  Conveyance amount component in your salary slip

b) It is a part of the in-hand salary

c) It affects the in-hand salary of those employees who are working at junior levels.

5. Leave Travel Allowance (LTA)

 LTA covers the cost of travel when the employee is on leave with his/her family members. To claim LTA, the employee is required to submit the proof of travel. Furthermore, LTA is relevant only for two days leave in once a year and other expenses during the travel cannot be claimed

Some features of LTA are:

a) Whether you travel alone or with family, LTA is exempt from tax for up to two journeys in a block of four financial years.

b) It is not a part the of in-hand salary

6. Medical Allowance

 If an employee meets with an accident or any other type of injuries while he/she is working for the organization then he can claim for the medical allowance. The employee needs to submit proof of all his medical expenses to claim the medical allowance.

Some features of medical allowance are:

a) Medical allowance is exempted up to Rs 15,000 if the employee is able to submit all the required medical bills.

b) It is not a part the of in-hand salary

7. Performance/Special Allowance

 It is an amount offered to an employee by its employer as a reward in case of his/her extraordinary performance. It is really important to motivate the employee and encourage them as much as possible.

Some features of performance/special allowance are:

a) Performance/Special Allowance is fully taxable

b) It is a part of the in-hand salary

8. Tiffin/Meals Allowance

 An organization can also provide tiffin/meal allowance to their employees. It is partially taxable.

9. City Compensatory Allowance (CCA)

 CCA is paid to the employees by their employers to help them bear the cost of living in urban areas or big cities.

10. Other allowances

 This comprises of the various tax-saving allowances paid by an organization for any reason that may help you in claiming income tax rebate from your annual income.

Some features of these allowances are:

a) It is fully taxable

b) It may or may not be a part of the in-hand salary

Salary Slip Deductions

Employees Provident Fund (EPF)

 This component of your salary slip, which is deducted from your salary, is referred to as provident funds. The fund amount that is deducted from your salary is usually 12% of the basic salary that you get after your retirement.

Your contribution towards the Employees Provident Fund is exempted from tax according to the Section 80C of Income Tax Act.

Professional tax

 This component is levied on all individuals who have an income. It includes salaried, professionals, and traders who earn money. Professional tax is a type of a direct tax that is levied in some states and its calculation is done on the basis of an individual’s tax slab.

Tax Deductible at Source (TDS)

 TDS is referred to as the amount of tax that is deducted by your organization on behalf of the Income Tax Department. You can reduce the TDS amount by investing in tax-saving schemes and submitting the relevant documents to your organization.

How knowledge of salary slip increases your take-home salary?

You can increase your take-home salary by following some of the tips stated below:

  • The easiest way to increase your take-home salary is by cutting down your basic salary and adjusting it with long-term benefits. A higher basic salary means you need to contribute more to DA, HRA, and Employees Provident Fund. However, reducing your EPF contribution might harm your retirement plan.
  • Eliminate special allowances that are fully taxable and adjust it with tax-free benefits.
  • Get maximum benefits from travel and medical allowances
  • Variable pay is fully taxable, and thus negotiate it to the minimum amount

Differences between Cost to Company (CTC) and in-hand salary

  • Cost to Company (CTC) can be defined as the total amount an organization will spend on an employee during a given year. CTC involves salary, pension, PF contributions, allowances, etc.
  • On the contrary, in-hand salary is defined as the amount an employee receives as a monthly salary after various deductions like Income Tax, PF contributions, Professional Tax, etc.

Taxable/partially taxable & non-taxable components of salary slip

Components Taxable/Partially taxable/Non-taxable
Dearness Allowance (DA) Fully taxable
Basic Pay Fully taxable
House Rent Allowance (HRA) Partially Taxable
Conveyance Allowance Partially Taxable
Medical Allowance Partially Taxable
City Compensatory Allowance (CCA) Fully Taxable
Tiffin/Meals Allowance Fully Taxable
Performance/Special Allowance Fully Taxable
Leave Travel Allowance Partially Taxable
Other Allowances Fully Taxable
Allowances paid by the government to its employees living abroad Non-taxable
Allowances paid to the judges of Supreme and High Court Non-taxable
Allowances paid by UNO to its employees Non-taxable
Allowances to the retired chairman or members of UPSC Non-taxable

Legal Validity of Manual & Digital Pay Slips

Salary slips in either manual or digital format hold the same legal position. However, any sort of meddling with a monthly salary slip is a criminal offence.

How to Create Salary Slip Online in Easy Way?

When employees are paid in addition to their ordinary hourly rate formwork performed over a standard shift the amount of money paid appears on the Pay Slip. Now that you know how important Salary Slip is, you must download it. It’s very simple. Just follow these steps and get your Pay Slip.

  1. Download Salary  Slip in word, PDF, Excel Format
  2. After Download Choose a period for which you want your Salary Slip indicated against the year and month.
  3. Fill Your organization details, Employee ID, Company Name, Designation, Company Address, Phone No Etc.
  4. Enter your employee Details Salary components whichever applicable.
  5. Enter your PAN.
  6. Now save your file and take  a printout on paper  reorganization letterhead
  7. Also, Don’t forget to get it verified by the Hr head with the organization stamp and signature.

Now, this was a demonstration of how one can download and edit the Salary Slip. The process is the same, more or less. You can go to your employing company’s website. And, follow a similar process to obtain your Pay Slip.

What do you understand by Salary Certificate? How is it different from a salary slip?

The salary certificate is a verified document that is issued by the head of an organization to its employee to prove his employment. It validates the relation of the employee with the organization he is working for a given period in return for salary payments.

A salary certificate is different from a salary slip in the following ways:

  • A salary certificate might not show the detailed break-up of the monthly salary an employee receives, whereas the salary slip furnishes a detailed break-up of income and deductions made in the monthly salary.
  • The salary certificate confirms proof of employment but does not indicate the financial status of an employee. On the other hand, salary slip not only confirms proof of employment but also gives a complete idea of the financial status of an employee.

Conclusion

Thus, it can be said that salary slips are very essential for an employee to avail of several long-term benefits.

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