Your Salary Slip Terminology, Format, And More Explained!

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Salary Slip Terminology

If there were a list made about the things that are scarier than ghosts (if they at all exist), Salary Slips would have had topped the list. The individuals who disagree must be in the HR or administration department. Otherwise, looking at the intricate elements of the payslip can leave anyone, especially a novice perplexed. 

High chances that this is the case with you too. But not anymore! 

Keep reading the blog and by the end of it, you will be able to not just read but understand your salary slip format and terminology perfectly. 

What is a Salary Slip? 

The Employee Salary Slip or Payslip is a stamped document given by the employer on or after a few days of salary credit. The document mentions the amount credited as salary for the month after specifying the deductions and bonuses for the period. Issued to keep a record and proof of the employee’s salary details; HRA, Bonus, TA, DA and many others are a part of the salary slip format. 

The salary slip is either made in word or excel. The salary slip format in word and the salary slip format in excel are slightly different from each other, however, the components continue to be the same. We will show you both of them in this blog ahead. 

Salary Slip Terminology

Income and Deductions are a major part of a salary payslip, both of them are constituted of various components. Listed below are these terms along with their meanings.

  • Income

As the word suggests, the income contains the monthly salary of the employee. It includes,

Basic Salary

Basic salary is the fixed salary amount. It is 35 to 40 per cent of the take-home salary and the employee receives the same before bonuses and after-tax. 

Dearness Allowance

This allowance is paid to the employees so that they don’t have to suffer from market inflation and is provided to the employee by the employer to manage their expenses without much hassle. 

House Rent Allowance (HRA)

It is the allowance given by the company to its employees to reimburse their house rental. The same is determined by the location they stay in. The amount is generally 40 to 50% of the basic salary. 

Conveyance allowance

Also known as travel allowance, this allowance is one of the income components that is given to reimburse the home to work to and fro travel. 

Leave Travel Allowance (LTA)

This allowance, in particular, is given to the employees who want to get their leave travel finances covered along with immediate members in the family. 

Medical Allowance

This income component is a fixed allowance that is given to employees for medical expenditure. They don’t need to show the bills to substantiate this expense. 

Bonus & Other Special Allowances

This allowance is not fixed and it is given to employees on the basis of performance, or any other parameter discussed at the time of appraisal or hiring to keep the employee morale high. Please note that this allowance is not fixed. 

  •  Deductions

The amount subtracted from the taxable take-home salary is known as deductions. So, the below-mentioned salary slip components are found in the deductions column. 

Provident Fund

It is a contribution that is mandatory for the employees whose basic salary is below Rs. 10,000. For the employees whose basic salary is above that, contributing 12 % of the basic salary amount is optional. The same amount is contributed from the employer’s side as well. 

Professional Tax

There are tax slabs defined every year in the country and the employees who fall in any of the tax slabs categories are required to pay a small amount of their salary to the government every month. 

Tax Deductible at Source (TDS)

TDS is the tax that is subtracted at the time of transferring the salary from the employer’s end. 

Salary Slip Format

A salary slip format is a systematic structure that is used for maintaining the financial information of the monthly salary of the employee. 

The format may vary a little from company to company. But, every salary slip format in word or salary slip format in excel must include basic salary, LTA, HRA, PF deduction, Medical Allowance, Professional Tax. 


Here is the most widely used format for your understanding-

Company Name

Address

Month & Year 

PARTICULARS AMOUNT

Basic Salary                                                                                      XXXXX

HRA                                                                                                    XXXXX

LTA                                                                                                     XXXXX

Bonus                                                                                                 XXXXX

PF                                                                                                       XXXXX

Professional Tax                                                                             XXXXX

TDS                                                                                                    XXXXX

——————————————————————————————————-

Total                                                                                                 XXXXX

Stamp & Signature:                                                    _____________________

Recommended for you: CTC Breakup: All Your Salary Components Decoded!

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Sukriti Saini

Sukriti Saini works as a content marketing strategist at HROne. She has done Bachelors in Journalism from Delhi University and carries several years of experience in content development. HR trends, Productivity, Performance and topics related to Employee Engagement garner most of her writing interest here. During leisure, she loves to write and talk about fashion, food & life.

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