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 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.
As the word suggests, the income contains the monthly salary of the employee. It includes,
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.
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.
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.
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.
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.
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.
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.
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-
Month & Year
Basic Salary XXXXX
Professional Tax XXXXX
Stamp & Signature: _____________________
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