{"id":5105,"date":"2022-01-07T13:30:24","date_gmt":"2022-01-07T13:30:24","guid":{"rendered":"http:\/\/43.204.200.242\/hr-glossary\/pay-slip\/"},"modified":"2024-03-27T12:55:43","modified_gmt":"2024-03-27T07:25:43","slug":"pay-slip","status":"publish","type":"hr-glossary","link":"https:\/\/akriviahcm.com\/resources\/hr-glossary\/pay-slip","title":{"rendered":"Payslip"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-29555 size-full\" src=\"https:\/\/akriviahcm.com\/resources\/wp-content\/uploads\/2022\/01\/Salary-slip-1.png\" alt=\"what is Payslip\" width=\"1366\" height=\"768\" \/><\/p>\n<h2>What is payslip?<\/h2>\n<p>A payslip is a document that an employee receives from their organization with their monthly salary. All important elements and details about the monthly salary are covered here, like:<\/p>\n<ul>\n<li>Gross salary<\/li>\n<li>Various deductions<\/li>\n<li>Net take-home pay<\/li>\n<\/ul>\n<h3>Why payslip is important?<\/h3>\n<ul>\n<li>\u00a0If an employee is changing their job, the payslip is evidence of their last drawn salary.<\/li>\n<li>This allows them to ask for higher pay from their future employers.<\/li>\n<\/ul>\n<p>A salary slip may be a conventional, physical paper-based document or a digital one duly mailed to an employee. Employers must periodically provide a salary slip to their employees as proof of the salary paid to them, and the deduction carried out thereof.<\/p>\n<h3>What comes under the basic structure of a payslip?<\/h3>\n<p>Every business follows its prescribed salary slip format, but its essential components will mostly remain the same. Here are the common components:<\/p>\n<ul>\n<li>Date<\/li>\n<li>Organization\u2019s details:\n<ul>\n<li>Name<\/li>\n<li>Address<\/li>\n<li>Logo<\/li>\n<\/ul>\n<\/li>\n<li>Employee\u2019s details:\n<ul>\n<li>Name<\/li>\n<li>Code number<\/li>\n<li>Department<\/li>\n<li>Designation<\/li>\n<li>PAN<\/li>\n<li>Aadhaar number<\/li>\n<li>Bank account number<\/li>\n<li>Employee Provident Fund (EPF) account number<\/li>\n<li>Universal Account Number (UAN)<\/li>\n<li>Total number of days worked<\/li>\n<li>Total number of leaves availed<\/li>\n<\/ul>\n<\/li>\n<li>A description of the earnings and deductions as applicable to the employee<\/li>\n<li>The net salary amount is described in numerals and words<\/li>\n<\/ul>\n<h3><strong>The core components of a salary slip<\/strong><\/h3>\n<p>A salary slip displays various essential components of an employee\u2019s salary like:<\/p>\n<ul>\n<li><strong>Basic salary<\/strong><\/li>\n<li><strong>Allowances, such as:<\/strong>\n<ul>\n<li>House Rent Allowance (HRA)<\/li>\n<li>Dearness Allowance (DA)<\/li>\n<li>Conveyance allowance (CA)<\/li>\n<li>Leave travel allowance, etc.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Major deductions, such as:<\/strong>\n<ul>\n<li>Provident fund<\/li>\n<li>Income tax<\/li>\n<li>Professional tax<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h4><strong>Here\u2019s a detailed note on these components.<\/strong><\/h4>\n<ul>\n<li>The basic salary comprises the total monthly take-home amount that usually constitutes 30 to 50% of the employee\u2019s total compensation. However, the percentage of basic to total salary does not follow any prescribed format and, therefore, varies from organization to organization.<\/li>\n<li>House Rent Allowance (HRA): It is the second-largest component of an employee\u2019s salary after the basic salary. It is calculated as a proportion of the basic pay and, in most cases, will be between 40\u201350% of the basic salary. Including the HRA component in the salary, slip helps structure tax efficiently.<\/li>\n<li>Medical expense reimbursement: As mentioned on an employee\u2019s salary slip, a medical allowance is a fixed amount paid by the employer and is fully taxable.<\/li>\n<li>Transport\/Conveyance allowance: It is mentioned on an employee\u2019s salary slip if the employer provides allowances to the employee traveling for official purposes.<\/li>\n<li>Special allowance: After the above components have been covered, the remaining salary is known as a special allowance and is fully taxable for the employee. It is good to place any tax-saving options \u2013 like free meal passes \u2013 under this category.<\/li>\n<li>Variable component: This component of the salary slipcovers performance-linked incentives and bonuses. It is usually 10 to 15% of the total cost to the company and is fully taxable.<\/li>\n<li>Provident Fund: This is the employer\u2019s and employee\u2019s equal contribution, with 12% of the amount being deducted monthly by the employer from the employee\u2019s salary.<\/li>\n<li>Income Tax: This is the total tax payable by the employee after accounting for all deductions and exemptions and taking into account the taxation slab they fall under.<\/li>\n<li>Professional tax: This is the amount charged by the state government to allow individuals to practice certain professions.<\/li>\n<\/ul>\n<p><strong>Example<\/strong><\/p>\n<p>Let us understand the essential salary components with the help of an example. Suppose Mrs Thompson\u2019s CTC is Rs. 7,00,000. This is the breakdown of her <a href=\"https:\/\/akriviahcm.com\/resources\/hr-glossary\/ctc-cost-to-company\">cost to the company (CTC)<\/a>:<\/p>\n<ul>\n<li>Basic Salary (i.e., 50% of salary): Rs. 3,50,000<\/li>\n<li>DA (i.e., 30% of basic): Rs. 2,10,000<\/li>\n<li>HRA (i.e., 40% of basic + DA): Rs. 2,24,000<\/li>\n<li>CA (Rs. 1,600 per month): Rs. 19,200<\/li>\n<li>Special Allowance (based on performance): Rs. 8,700<\/li>\n<li>EPF Contribution: Rs. 21,600<\/li>\n<\/ul>\n<p>The <a href=\"https:\/\/akriviahcm.com\/resources\/hr-glossary\/gross-salary\">Gross Salary<\/a> refers to the amount before taxes, and other charges are deducted. But, it comprises any bonus, overtime, etc. Therefore, Mrs Thompson\u2019s gross salary is Rs. 7,00,000 \u2013 21,600, i.e.Rs. 6,78,400. This amount is used to calculate the net pay.<\/p>\n<h3>Why are payslips important?<\/h3>\n<p>The importance of a payslip to an employee cannot be understated. It helps in:<\/p>\n<ul>\n<li>Preparing income tax returns<\/li>\n<li>Accessing subsidized facilities \u2013 medical care, food grains, etc.<\/li>\n<li>Borrowing money by acting as proof of credit<\/li>\n<li>Negotiating for higher pay with new employers<\/li>\n<li>Acting as proof of employment for enrolling in a university abroad, applying for a travel visa, etc.<\/li>\n<\/ul>\n<h3>Advantages of shifting from manual to digital salary slips<\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-29556 size-full\" src=\"https:\/\/akriviahcm.com\/resources\/wp-content\/uploads\/2022\/01\/Payslip-1.png\" alt=\"Excel Vs Digital Salary Slip\" width=\"1366\" height=\"768\" \/><\/p>\n<p>There are many reasons to change from manual to digital salary slips with the help of cutting-edge payroll software:<\/p>\n<ul>\n<li>It helps a business\u2019s administration department use its time efficiently.<\/li>\n<li>It helps reduce costs because of not having to print salary slips on paper and mail them to the employees. Apart from that, not using paper is good for the environment.<\/li>\n<li>Besides, with remote work becoming commonplace, sending digital salary slips to remote workers\u2019 devices is extremely convenient.<\/li>\n<\/ul>\n<p>We are in the middle of the most profound digital revolution transforming how everyone lives and works. Digital payslips are an essential part of the way forward. It, therefore, makes sense to leverage new-age tools from highly regarded\u00a0<strong><a href=\"https:\/\/akriviahcm.com\/products\/payroll-software\" target=\"_blank\" rel=\"noopener\">payroll software<\/a><\/strong>, like Akrivia HCM. Doing so will save costs and time for the HR department and make the salary disbursal process more efficient.<\/p>\n","protected":false},"featured_media":29555,"template":"","class_list":["post-5105","hr-glossary","type-hr-glossary","status-publish","has-post-thumbnail","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>What is Payslip? | Digital Salary Slip | Akrivia HCM<\/title>\n<meta name=\"description\" content=\"The Payslip includes information such as deductions and earnings of an employee and proof that they received a salary for the month.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/akriviahcm.com\/resources\/hr-glossary\/pay-slip\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Payslip\" \/>\n<meta property=\"og:description\" content=\"The Payslip includes information such as deductions and earnings of an employee and proof that they received a salary for the month.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/akriviahcm.com\/resources\/hr-glossary\/pay-slip\" \/>\n<meta property=\"og:site_name\" content=\"Akrivia HCM\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AkriviaHCM\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-27T07:25:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/akriviahcm.com\/resources\/wp-content\/uploads\/2022\/01\/Salary-slip-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1366\" \/>\n\t<meta property=\"og:image:height\" content=\"768\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@AkriviaHCM\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/akriviahcm.com\\\/resources\\\/hr-glossary\\\/pay-slip\",\"url\":\"https:\\\/\\\/akriviahcm.com\\\/resources\\\/hr-glossary\\\/pay-slip\",\"name\":\"What is Payslip? 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