Assuming there was a list of things frightening than ghosts (if ghosts exist at all), Salary Slips would have led the pack. People who disapprove must work in human resources or administration. Otherwise, looking at the numerous aspects of the payslip might be perplexing for anybody, especially a newbie.

There’s a good probability that this applies to you as well. But not any longer!

Continue reading the article, and by the conclusion, you will be able to not only read but also fully have a hang of your payslip structure and terminology.

What exactly is a Salary Slip?

The Employee Salary Slip or Payslip is a validated document provided by the company on or shortly after salary credit. After describing the deductions and incentives for the period, the paper indicates the amount credited as salary for the month. The payslip format is used to preserve a record and verification of the employee’s compensation data; HRA, Bonus, TA, DA, and many more are included.

The payslip is created in either Word or Excel. The salary slip format in Word and the salary slip format in Excel are subtly different, but the components remain the same. In this article, we will demonstrate you both of them.

Items in the Salary Slip

Earnings and deductions are significant components of a salary payslip; both are made up of many components. These terminologies, along with their definitions, are listed below.

Earnings

The earnings, as the name implies, includes the employee’s monthly compensation. It consists of:

Basic Wage

The basic pay is a set sum of money. It is 35 to 40% of the take-home pay, and the employee earns the same before and after incentives.

Dearness Allowance

This allowance is offered to employees to protect them against market inflation and is supplied by the employer to help employees manage their spending with ease.

House Rent Allowance (HRA)

It is the allowance provided by the employer to its employees in order to cover their housing costs. The same is governed by where they dwell. The sum is usually between 40 and 50% of the base pay.

Conveyance/Travel Allowance

This allowance, often known as a travel allowance, is one of the income components that is granted to compensate the home to work and vice-versa travel.

Leave Travel Allowance (LTA)

This allowance is granted to workers who want their leave travel expenses covered along with close family members.

Medical Care Allowance

This income component is a set amount allocated to employees for medical expenses. They do not need to provide the bills to prove this spending.

Other Special Compensations & Bonuses

This allowance is not pre-determined and is granted to employees based on performance or any other criterion mentioned during the assessment or recruiting process in order to maintain employee morale high. Please keep in mind that this limit is not set.

Deductions

These are the amounts that are deducted from the taxable take-home pay. As a result, the salary slip components listed below can be found in the deductions column.

Provident Fund

It is an obligatory payment for employees whose basic wage is less than Rs. 15,000. Contributing 12% of the basic pay amount is optional for employees whose basic income is more than that. The same amount is also donated by the employer.

Professional Tax

Every year, tax slabs are determined in the country, and employees who fall into one of the tax slab categories are expected to pay a tiny portion of their monthly wage to the government.

Tax Deducted at Source (TDS)

TDS is the tax deducted at the time of salary transfer at the employer’s end.

 

Salary Slip Template

A payslip template is a formal structure for storing financial information about an employee’s monthly salary.

 

The format may vary a little from firm to firm. However, every payslip format in word or salary slip format in excel must include the following items: base salary, LTA, HRA, PF deduction, Medical Allowance, and Professional Tax.

Here is the most broadly adopted format for your comprehension-

 

Company Name –

Address –

Month & Year – 

PARTICULARS AMOUNT

Basic Salary                                                                                       XXXXX

HRA                                                                                                    XXXXX

LTA                                                                                                     XXXXX

Bonus                                                                                                XXXXX

PF                                                                                                      XXXXX

Professional Tax                                                                              XXXXX

TDS                                                                                                   XXXXX

——————————————————————————————————-

Total –                                                                                            XXXXX

Stamp & Signature:                                                            _____________________