A breakdown of your salary slip

Salary slips, also known as pay slips, are sent to salaried employees every month. A salary slip is an important financial document. It is a proof of income and aids in tax-saving investments like Equity Funds, PPF, NPS and Life Insurance. Let us understand what is a pay slip in detail.

Do note that the components mentioned here are some of the common components included in a pay slip. However, salary slips vary from company-to-company. The components included will depend on the benefits, allowances and perks offered by your employer. Even the procedure on how to access and download your salary slip (in case of digital only salary slips) will vary from company-to-company. Check these details with your employer for better understanding.

Payroll number

A payroll number on the salary slip is a unique identification number allocated by the employer. It is used for administrative purposes, identifying a particular employee during salary payments, streamlining payroll processing and accurate record-keeping.

Salary slip format

The salary slip format includes the company logo, employee details, pay period and a breakdown of earnings and deductions. It is designed to be clear and comprehensive, providing all necessary compensation information.

Components of a salary slip

Income:

Basic salary: The fixed amount you earn before allowances
Dearness allowance (DA): Compensates for rising inflation
House rent allowance (HRA): Reimbursement for rent expenses
Conveyance allowance: Covers commuting costs
Medical allowance: Helps with medical expenses
Leave travel allowance (LTA): Allowance for travel during leave
Special allowance: Varies depending on your role or company policy

Deductions:

Provident Fund (PF): A retirement savings scheme where both you and your employer contribute
Professional tax: A fixed amount tax levied by the state government
Income tax (IT): Tax deducted based on your tax bracket
Unpaid leaves: Deductions for leaves taken beyond your entitlement
Health cover premiums: If you opt for employer-provided Health Insurance, this will be deducted annually.

Importance of a salary slip

Proof of employment: Salary slips are official proof of employment, often required for various financial and legal purposes.
Helps avail loans: Banks and financial institutions often require a salary slip to assess your creditworthiness. For instance, Axis Bank's Personal Loans and Home Loans require a salary slip to determine the loan amount and your repayment capacity.
Income proof: A pay slip is essential while applying for insurance policies and Credit Cards.
Seeking future employment: Pay slips provide a verifiable record of past employment and compensation history for future job applications.

Difference between CTC, gross and in-hand salary

Cost to company (CTC) is the total cost an employer incurs for an employee, including benefits and allowances. It includes all the components of salary, gratuity, both your and your employer's share to PF, and other allowances.

Gross salary is the amount payable to an employee before deducting taxes, your PF share, gratuity, etc., from the CTC.

In-hand salary or net salary is the amount you get in your Salary Account after all deductions. For a comprehensive banking experience, consider Axis Bank's Suvidha Salary Program. It offers a range of benefits, including no minimum balance requirement, free ATM withdrawals, higher daily withdrawal limits and complimentary Credit Cards.

Also Read: Salary Account vs Savings Account

FAQs

How can I access my salary slip online?

Most companies provide digital access to salary slips through secure employee portals or HR management systems.

How do I download my pay slip?

Typically, you can log into your company's HR portal, navigate to the 'Payroll' section and download your pay slips in PDF format.

Are handwritten pay slips legal?

While not illegal, handwritten pay slips are uncommon. Most organisations use digital systems for accuracy and professionalism.

Do banks also ask for salary slips?

Yes, banks often require salary slips for various services. They may request them for loan or Credit Card applications or to open certain types of accounts.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision