Salary slips are given to employees by employers every month. Not many people keep their salary slips. Some throw them away, while some misplace them, never to be looked for again. In this article, we’ll cover what is Salary Slip, also called a “payslip”? How to prepare Salary Slip in Excel? We have also included various salary slip formats in excel, word and pdf.
Salary slips do have their importance, and most of us are blind as to what those are. And, we don’t believe that it is our fault. We have not reached it to the point where we will eventually need them. Let’s prepare ourselves for that, shall we?
In this blog, we’ll also cover the importance of salary slips and share a few salary slip samples for the same.
Salary Slip Meaning
A salary slip, also known as a payslip, is a document containing an employee’s salary details, including basic pay, bonuses, deductions, etc., given to the employee by the employer each month. The recipients are either given hard or soft copies and sometimes both.
All organisations do not give salary slips out. Smaller size companies don’t usually provide their employees with monthly payslips. In this case, if employees want to receive monthly salary slips, they can request their HR to do so or get a salary certificate.
We highly advise that you keep your payslips safe because they can come in handy as there are times when you will have to provide them (see Importance Of Salary Slips).
The format of a salary slip differs depending on the organisation or country.
Also Read: Top 12 Highest Paying IT Jobs in India
SALARY SLIP FORMAT EXCEL
Format of A Salary Slip
Salary Slip format: A salary slip must contain the following:
- Name of the company
- Company’s logo
- Name of the employee
- Employee’s designation and department
- Employee’s ID number
- Employee’s PAN/Aadhaar number
- Employee’s bank account number
- Employee’s Provident Fund account number
- Number of leaves taken by the employee
- Effective workdays of the employee
- UAN (Universal Account Number)
- Earnings and deductions
- Gross and net pay
Download Different Formats of Payslips
|Download Salary Slip Format in Excel||Download|
|Download Salary Slip Format in Word||Download|
|Download Word Salary Slip Format||Download|
|Download Salary Slip PDF Format||Download|
|Download Pay Slip||Download|
Importance of Salary Slips
Salary slips are pretty crucial in the world of work. They are legal proof that you are a salaried employee. So, it would help if you always kept them safe as you would other important documents.
Here are some of the reasons why it is important to keep your payslips safe:
To prove that you are a salaried employee
Suppose you want to apply for a visa or to universities. In that case, you need to provide a document that shows proof of employment. This is when your salary comes in handy. This will show them your designation and your last drawn salary.
To avail loans/credit cards
When applying for a loan or credit card, the bank or creditor needs to be assured that you have a concrete plan and a way to pay them back. Your salary slip can act as proof that you have a valid income to pay them back every month (or the payment plan chosen by you).
To negotiate salary
When changing companies, salary slips are your weapons during salary negotiation. You can ask for a salary hike based on your last payslip. Moreover, bear in mind that the HR person of the new company you are about to join will ask for your salary slips of at least the last 2 months of your previous employment.
To help calculate income tax payment.
As your salary slip contains components such as house rent, travel, medical allowances, among others, You can use it to prepare the income tax returns. It helps you in calculating who much to be paid and how much can be reclaimed.
Components of a Salary Slips
Each month employees receive their salary statements which the employers make. Although most of the companies give them out via emails, some companies still give out hard copies. If you look at your salary slip(s), you will see many components, all of which you probably won’t understand, but worry not, we will cover them here.
Components of a salary slip can be understood in two parts: Let’s look at the common components of payslips.
The following salary slip components appear under the incomes part of the salary slip:
1. Basic Salary
Basic salary is an essential component of salary slip. This is the base amount of your salary before any dedication or addition. This is made up of about 35% to 40% of your total salary.
2. House Rent Allowance (HRA):
As the name suggests, this is an addition to the basic salary given to the employee for their house rent.
3. Leave Travel Allowance:
This component of a salary slipcovers the employee’s travel costs while they are on leave.
4. Conveyance Allowance:
This covers the employee’s travel cost to and from work.
5. Variable Allowance:
Variable allowances are given to employees when they have reached or go beyond their goals.
6. Medical Allowance:
This helps in covering the employee’s medical bills.
7. Personal Allowance:
This is the amount of income that the employee is entitled to receive free of tax each year.
8. Special allowance:
This is given to the employee as a mode of encouragement.
The following salary slip components appear under the part of the deduction of the payslip:
1. Provident Fund (PF):
this is the accumulation of funds for an employee’s retirement period.
2. Professional Tax:
This is applicable only in some states in India. It is calculated based on a person’s tax slab.
3. Tax Deductible at Source (TDS):
The number you see on this component is the amount calculated and dedicated by your employer on behalf of the Income Tax department.
Again, bear in mind that the format and components of a salary slip differ depending on the company or the country as there is no specific universal salary slip format.
Salary Slip Formulas
We have mentioned some of these Salary Slip Excel Formats with predefined formulas. It can help to calculate the Gross earnings and deductions.
|Taxable Income||Gross Salary – Deductions|
|CTC= Total salary package of the employee||Gross Salary + EPF + Gratuity + Others|
|Gross Salary||Basic Salary + HRA + Other Allowances|
|Net Salary||Basic Salary + HRA + Allowances – Income Tax – Employee’s Provident Fund – Professional Tax|
We hope the information as mentioned above on salary slip format, importance and components help you understand more about salary slips and their importance.