Getting your salary slip every month but unaware of what it actually means is quite common in our era. We just keep that kind of document for our CAs and why not? Like of course this is why we have one. But the scenario is rather tragic when you are a startup or a company without any knowledge of what a salary slip is set aside, the employee salary slip format. In this article, we will provide you with employee salary slip format and inform you about salary slip generator and checking employee salary slip online.
Employee Salary Slip Format in Excel
Employee salary slip is basically a document about which both employer and employee should be well versed. Even when it is the work to be done by the finance department or your chartered accountant, knowing the basics and what it really is vital for you. So let us start with learning about Salary Slip.
What is a Salary Slip?
Salary slip is a document an employee receives every month from the organization having details about the bifurcation of the total amount credited in your account and also having the deducted components like EPF, Professional tax. It is a legal proof that the salary is provided to the employee of a certain amount.
Many times there are a few small organizations that do not issue monthly salary slips but you can ask for a salary certificate from them at the end of the year. It is mandatory for organizations to provide a copy to employees every month. Also, these should be provided privately to every employee as per the rules governing.
Basic things you will find in salary slips are like HRA, Leave travel allowance, Bonus, Medical allowance, PF deduction etc. With these, you can guess how important it is to know about employee salary slip format.
Importance and benefits of Salary Slip
Before we jump directly to components or format, first let us get an overview of why knowing Employee salary slip is important
1. Better tax planning
With a salary slip one can plan their income and manage to do necessary investments for deductions available in Income tax ahead of time. Also, people falling in the criteria of advance tax have huge help here. This way managing your income will also be easier and Income tax return related discrepancies will be less burdensome.
2. Investment choice
Employee salary slip formats have some fields like forced saving to which employees have an option to opt out and most of the employees are unaware of these. For example – ESI or EPF which are not compulsory. Rather one can opt out of such saving schemes and invest in higher interest yielding ones.
3. Better understanding of new offers
Get smarter with the knowledge of employee salary slip format and be better at negotiating offers from new companies. Sometimes it seems that they are providing better salary but with in-depth component understanding judge it for yourself if that is beneficial for you to just accept it. It is a kind of a bargaining chip for you.
4. Easy availability of loans
Employee salary slip works as proof of employment in all legal matters. In case of any financial difficulty, it is easier this way to get a loan. Also, it helps with applying for travel visas or universities etc.
5. Assess your creditworthiness
Employee salary slip format lets you assess your creditworthiness and negotiate repayment of loans. It confirms the source of income and financial stability of an individual along with providing confidence to the one providing the credit line. Benefits also include ease in getting the option of fixed EMI.
Components of Salary Slip
There are two main aspects in which components are divided in Income and Deduction.
Income
The basic component of a salary slip is as the name suggests salary. There are some more elements connected to it which are mentioned below.
1. Basic Salary
Basic salary is quite a basic yet important topic in employee salary slip format. It is almost 30% – 40% of your total salary. Basic salary is used to determine other allowances as well. It is a fixed component to be present in a salary slip.
2. Dearness allowance
Dearness allowance (DA) is a component which is given to a few employees or by a few employers to every employee. Hence, this one is not a mandatory part in the Employee salary slip format. DA is paid to reduce the effect of inflation generally. In most cases, it is provided to Government employees only which is generally about 30% to 40% of the basic pay.
3. House rent allowance
Also known as HRA, it is an allowance most widely provided in India. Basically, in HRA, an employer pays you for your house rent as a part of your gross salary. This one is only provided to those who live in a rented house and is about 40% to 50% of the salary. This part is not exempt in income tax and tax on this allowance is to be calculated.
4. Leave travel allowance
LTA is an allowance paid by the employer to the employee in case of reimbursement of cost of travel during his leave. This also includes the cost of travel for the immediate family in itself. To avail this there should be proof of journey required to be submitted. Income tax only provides exemption for up to two travels in a block of four years.
5. Conveyance and Medical allowance
Conveyance allowance is one which covers your expense of travelling from home to work and vice versa. Medical allowance is paid as a reimbursement of medical expenses of the employee.
6. Bonus
Bonus is also the variable component of the employee salary slip format. It is based on performance criteria and has no such limit provided in the act but should be justifiable and are mostly taxable only.
7. Others
There can be a few other kinds of allowance depending upon the organization. Such other allowances are also formed as a part of employee salary slip. For example – special allowance, gifts etc.
Deduction
The other side of income is deduction and here is what all get included in Salary slip when it comes to deduction.
1. Employee Provident Fund
It is a mandatory deduction from employees salary to add in PF account where employer also has to pay 12% of the employee’s basic salary as his contribution in EPF account and these both get clubbed along with the interest arising on the money deposited. In this, all of the employee’s contributions are exempted.
2. Professional Tax
It is applicable only in a few states of India where Income tax provides you with an exemption of up to Rs. 5000/-
3. Tax Deducted at Source
It is the tax deducted at the source which means if you have salary up to a certain limit your tax will be deducted at the time of crediting your salary in your account by the company and they will file it with the Income tax. Later you can take its benefit while filing your income tax return.
Salary Slip Generator
As time has passed and companies have become advanced, they have shifted their database online. It allows employees to generate Salary slip online by going to company’s website. There are many general websites as well with salary slip generator that employees can use.
Most of these online salary slip generators ask employees to put certain details like company name, salary information, pay period etc. and in return will automatically generate a pay slip. It is an easy way to avoid the hassle of formatting and creating the pay slip. Similarly, there are many companies that allow their employees to check employee salary slip online.
Salary Slip Format
After learning about salary slip generator, let’s come back to the discussion about what employee salary slip format looks like. Following are some things which are included in the salary slip.
- Company’s name, address, and brand logo should be there.
- It must be dated.
- Employee’s name, unique number, designation and department shall be mentioned along with the PAN number.
- List of income with total leaves and number of days such income is for shall be noted therein.
- Gross pay and net pay shall be provided.
Also Read: How to Write a Formal Leave Letter Request? With Samples
Salary Slip Format in Excel
Given below is the employee salary slip format in MS Excel.
| COMPANY NAME | |||
| Salary Slip | Month | ||
| Employee name | Date of Joining | ||
| Employee code | Total Working Days | ||
| Designation | Number of Working Days Attended | ||
| PAN | Leaves allowed | ||
| Bank account | Leaves Taken | ||
| Bank name | Balance Leaves | ||
| INCOME | DEDUCTIONS | ||
| Basic Salary | Professional Tax | ||
| Dearness Allowance | EPF | ||
| HRA | TDS | ||
| Travel Allowance | |||
| Conveyance allowance | |||
| Medical Allowance | |||
| Assistant Allowance | |||
| Total | Total | ||
| Net salary | |||
| Employee signature | Employer signature | ||
We hope you now know the correct employee salary slip format and why it is important to understand its elements. As an employee, it is vital to reap all the benefits provided by your employer and fully understand things like salary slips and how you can use them properly.
