Talk about the heaps of paperwork and documentation that you need to perform and procure as a working professional! Sounds hectic and complicated, right? But, out of the gamut of papers that one needs to secure including different letters, certificates, receipts and other documents, payslip is one of the most essential records. Why? Because it gives you a clear picture of how much money you are being paid, is it the same as mentioned in your salary annexure of offer letter, are the calculations accurate and to make other kinds of analysis. Besides, if you resign and quit working with the current organization, this little piece of paper also acts as a proof of employment in the next one and helps the new employer to decide your salary.
By now, we have brought the significance of payslip into light and why it is important to have in-depth comprehension of the same. Having said that, a great deal of employees still do not have a complete understanding of the salary slip.
So, to simplify the explanation, we have divided the essential elements of a salary slip format into 3 parts - A, B and C. Let’s see what each of the sections comprise of:
All About Employee Information
The first part contains critical (and necessary) information about the employee as follows:
- Name of Employee: The first and the last name of employee as per any of his/ her personal IDs
- Employee ID/ Code: The ID or personnel no. allotted by the company at the time of onboarding
- Position and Department: The ones an employee had been admitted to during recruitment
- Date of Joining: The joining or first working day of an employee in the organization
- No. of Working Days: The no. of days in a month when the employee was marked ‘Present’
- No. of LOP Days: Stands for ‘Loss of Pay’; days when employee was marked ‘Absent’
- Pay Date: The date on which the salary of the employee is released/ deposited to account
- Bank Account/ Cheque No.: Salary account no./ cheque no. of the bank in which salary is transferred
- EPF Account No.: Employees’ Provident Fund account no. in which EPF contribution is deposited
- ESI Account No.: Employees’ State Insurance account no. in which the ESI contribution is deposited
- Universal Account No. (UAN): The 12-digit unique no. to access the EPF account for withdrawal
Benefits of the Monetary Earnings
This section includes the different types of monthly earnings that an employee is deemed eligible for getting paid such as:
- Basic Salary: The base income of an employee that remains same throughout employment; the allowances and deductions depend on it
- Dearness Allowance: A percentage of employee’s basic pay, offered to neutralize the impact of inflation on working professionals
- House Rent Allowance: For those living in a rented space, this is given as a relief
- Conveyance Allowance: To compensate for the amount paid by employees travelling with their own conveyance to and from the workplace
- Medical Allowance: A type of fixed allowance given to employees so that they can meet basic medical and healthcare requirements
- Special Allowance: Completely optional; depends upon the employer’s will in order to meet special needs of the employees
Charging of the Deductions
The last part includes the deductions from the salary of an employee for benefits and taxation purposes like:
- Employees’ Provident Fund: A post-retirement income benefit or government pension scheme which makes up to 12% of the employee’s basic salary + DA from employer’s and employee’s ends
- Employees’ State Insurance: It goes for the medical insurance of the employees; 4% of the employee’s basic salary + DA is taken out in which 3.25% is employer’s share and 0.25% is employee’s
- Professional Taxes: An indirect tax paid by the employees working directly or indirectly under the State Government of India such as CA, CS and lawyers among others
Now, next time you look at a payslip format, you will have the complete knowledge of what you are holding in your hands!
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