Many people are still confused about the “salary slip” importance and benefits. This guide will let you go through with all the major parts of salary slip details.
The salary which you get promised in the time of hiring.
Always comes less when you receive the salary. It happens because your salary divided into various parts.
What is Salary Slip & why Salary Slip is important?
Salary slip or payslip is a document that every employee receives monthly through their employer or HR.
It contains the information of salary deduction along with take-home salary information.
Salary slipcovers the component like HRA, bonus paid, basic salary, medical allowances, and transport allowances.
Along with employee code, date of joining, bank details, UAN number and so on.
Salary slip is one kind of proof of your salary deduction and salary fulfillment by the employer’s side.
Many companies are providing salary slip in mail format, pdf format, and paper format.
All format holds the same genuine peace of information.
You can ask your monthly payslip to the HR or Admin team.
Let me tell you how salary slip is important for you. With some major and important points.
Importance of Salary Slip.
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It is your proof of employment. |
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Help in a visa application. |
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Help for income tax returns. |
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It gives you the medical facility. |
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It helps you with increment proof. |
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Help you to assess a new offer in a better package. |
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It also helps you with your loan plan, credit, borrowing, and mortgage. Because it’s showing the stability of your work and trust. |
Salary slip validation is also important. In the last few years, many cases come up with payslip modification.
Therefore, save & side most of the companies are providing the salary slip in PDF format now.
Who Provide Salary Slip or Pay Slip.
As I have mentioned above salary slip is provided by the employer or admin staff. In many countries salary slip also called a payslip.
If might your company is not providing you the salary slip. Then as an employee, you have full right to ask for your salary slip.
Because through payslip only you will get the right information of your all deduction and add on benefits.
You can also register your email id with your HR and request them to send the monthly pay slip in your email id only.
So that you will not have to worried about the month’s payslip.
Different Between Salary Slip and Payslip.
Salary slip is the document that contains all salary-related information like other allowance, pan number, date of joining, leaves, bank information and so on.
However, payslip is mostly issued for a temporary purpose. Normally, both have the same value.
But payslip is usually allowed to blue colored employees or maintenance workers etc.
Still, the details in both are normally equally. That way there are no major differences in both.
Benefits of Salary Slip/Payslip.
Salary slip will give you the credibility proof for your future employment.
Many companies mention grade or rank in payslip too. Which will help you for a future government job (if you are looking for)!
It will give you a clear record which helps you for future investment and house loan.
It also shows the amount of deduction which is going into your salving account.
It works as your identity as well because it has your correct name and rest information.
It also works as an address proof because it contains your residence address.
Salary Slip Format or Structure.
Normally salary slip format or structure is divided into two parts. First in “Income” and second in “Deductions”.
The income slab shows the details of the salary getting part. It comes in various Column along with benefits names too.
Both sections come in the separate Column. So that you can understand in a better way.
Here is the components name which comes under the income part.
Basic salary.
It is the most important component of payslip. It comprises around 40% of the salary of an employee. However, this percentage varies from company to company.
And the basic salary is 100% taxable.
Dearness Allowances (DA).
DA is the second most important component of the salary slip. Because of its effect the inflation on the employee.
It also helps HR to decide your accommodation allowance, PF amount and other perquisites.
House rent allowance.
House rent allowances make your leaving easy. Because in this you will get one fix amount for your rent payout.
The amount of rent allowances also depends on your location.
To avail the rent allowances you have to give the rent agreement proof to your HR.
So, that they can cross-verify your details and add the allowances according to the company policy.
Conveyance allowance.
As its name says conveyance allowance, it gives you the expense of the travel which you expand home to office and office to home.
Other allowances.
Under other allowances, many thinks can be count such as uniform allowances, child education allowances and so on.
Reimbursement.
You can avail of the reimbursement allowances like fuel, food coupons, medical, etc.
Performance bonus.
It’s one kind of encouragement and appreciation mode. If you perform well in your company or in department then you can get this performance bonus too.
Arrears.
If might any kind of the previous amount are pending of your salary. Then it will also show as arrears in your salary slip.
Commission.
If might you give the huge contribution of your work for company sales up.
Then a few companies are also given the few percentages of the turnover, of the business to that employee too.
The percentage of the turnover of the business is called a commission.
Leave Travel allowance.
It usually covers the cost of your travel which you did on your leave.
However, it depends on the company policy too. Normally it’s given to an employee only once in two years.
To consume the benefits of the travel allowance. You have to provide the traveling tickets details and receipts stuff too.
Child education allowance.
This amount goes to you for child education. If you want to know about how much they pay monthly or yearly.
Then I would suggest please talk to your HR. Because the amount can be varied as per company to company.
Meals.
If an employer provides the meal to the employee. Then it comes under meal allowances. Or might be you can get the daily 50 bucks coupon for that.
Or it could be possible that you get a full refund once a month.
Special allowance.
Some other allowance which comes under extra benefits or you can say under special allowances such as motorbike allowance, fuel allowance, etc.
Medical allowance.
Many companies provide the medical allowance too. If you provide the correct and sufficient medical receipts to them.
However, reimbursement amount can differ depends on company to company.
Deduction:
Provided funds (PF).
This is your monthly saving amount which will provide you the retirement benefits.
Your contribution to PF is showing 12% of your basic pay in salary. The best part of PF deduction is that it does not fall in the tax bracket.
Employee state insurance (ESI).
This deduction is happening for your medical benefits. And usually, it starts to cut off from 21000 INR onwards.
In other words, if you are getting a salary of less than 21000 INR thousand.
Then you are not eligible for deduction. However, if you have a salary of 21000 or more.
Then your contribution to ESI was 1.75% of your gross salary.
Professional TAX.
All salary employees have to give the tax deduction to your state government.
Tax deducted at source.
Tax deduction which employees pay every month to their government.
It works under the tax slab of the employee. It actually comes under the income tax department.
If you want to reduce your tax deduction you can contact your employer for better resolution.
Other Components of Salary Slip.
Apart from the income part and deduction part of payslip. We do have some other important components also such as.
- Organization address.
- Company logo.
- Employee Post information.
- Employees Name.
- Pay Period.
- Pay Date.
- Date of joining.
- PF number.
- UAN number.
- Gross calculation.
- Tax information.
Foreign Salary Slips.
No matter which country salary slip or pay slip you are holding.
Foreign salary slip also has almost all the same components and structure. Validation of foreign salary slip is also important.
However, your foreign country salary slip will give save tax benefits in your native place too.
Manuel Salary Slip Vs. Computer-generated Salary Slip.
Manuel payslip is popular in the old days. But its time-consuming progress.
After creating the salary slip manually need to put the company stamp on that with an original signature which takes lots of time.
Might be if a company has a huge count of an employee then distributing of payslip is also one big issue.
So, as time change computerize salary slip are make work easy and comfortable.
Now you can easily take the print out of the payslip anywhere. It’s also come with an authorized stamp, signature, and logo.
Difference Between Gross Salary and Cost to Company.
Gross salary is the amount that discusses with you without any deduction. This means the salary amount committed by your employer in the time of hiring.
It’s included with dearness allowances, rent allowances, and travel allowances and so on.
The cost to a company is the amount which the company pays you once in the year.
The cost to the company comes with your provident fund, tax, and reimbursements.