What is a Salary Slip or Pay Slip?

8 min read • Published 6 October 2023
Written by Vaibhav Khandelwal

A salary slip is the document that an employer gives to an employee every month. It shows all the details about the salary and deductions thereof. You can get it either from HR in printed form or by email or you can download the same from the salary slip portal. A salary slip is an important document that shows employees’ salary and deductions made. In this blog, we will learn more about the salary slip and its components. 

Why is Salary Slip important?

A salary Slip is an important document for the employee as it shows the amount of salary and its various components. 

It is a legal document that employers give to employees every month. Following is the breakdown of its importance:

  1. A salary Slip is the legal proof of employment and is required for tasks such as visa applications, university admissions, job application, etc. It also helps to verify the last drawn salary of the individual, job position etc. in the company.
  2. It also provides a detailed description of earnings, deductions, and tax deduction components. Elements like salary, HRA, and travel allowance help the employee to plan their tax liabilities. Proper income tax planning ensures efficient management of tax payments and minimises deductions, rebates and allowances within the legal bounds.
  3. It also helps in seeking future employment as it is the evidence of the current pay scale. Past salary slips are often required by new employers to verify employment history and earnings, aiding in salary negotiations and evaluating experience.
  4. Financial institutions and banks rely on salary slips to assess an individual’s creditworthiness. It is also a fundamental requirement when applying for loans, credit cards, or mortgages, determining eligibility and setting credit limits. The creditworthiness reflected in an employee’s salary slip impacts the approval and terms of loans and credit cards.
  5. Salary slips can be utilised to access cost-free or subsidised services, such as medical care and food assistance. They function as proof of income, enabling individuals to qualify for government-sponsored programs and benefits.

Salary Slip Format

Salary slips typically have a standard format for clarity. This format usually includes:

  • Organisation Name
  • Month of Salary
  • Employee Code
  • Employee’s full name, department, job title, work location
  • Bank Account Information such as breakdown of earnings and deductions, salary components, House Rent Allowance (HRA) and Other Allowances, reimbursements
  • Net Pay

What are the Components of a Salary Slip?


  • Basic: This is the fixed portion of an employee’s salary, and it’s a crucial component used for various calculations, such as provident fund contributions and gratuity.
  • Dearness Allowance (DA): DA is an allowance given to employees to cope with the rising cost of living. It’s a percentage of the basic salary and can vary based on inflation rates.
  • House Rent Allowance (HRA): HRA is provided to employees to cover their housing expenses. The amount can vary depending on the employee’s location and can be partially or fully taxable.
  • Conveyance Allowance: This allowance is for covering transportation costs associated with commuting to work. It’s typically a fixed monthly amount.
  • Medical Allowance: Employees may receive a medical allowance to cover healthcare expenses. It can be a fixed amount or based on actual medical bills.
  • Leave Travel Allowance (LTA): LTA is meant to cover expenses when an employee travels with their family. It’s tax-exempt when used for specified travel.
  • Special Allowance in Salary: This is a flexible allowance that companies provide for various purposes, like meeting additional expenses not covered by other allowances.


  • Professional Tax: Some states impose a tax on an employee’s income, known as professional tax. The amount varies based on the employee’s salary and the state’s regulations.
  • Standard Deduction: The government allows a standard deduction from the gross salary to reduce the taxable income. This deduction aims to simplify tax calculations.
  • Tax Deducted at Source (TDS): Employers deduct TDS from an employee’s salary to fulfil their income tax liability to the government. The deducted amount depends on the employee’s taxable income.
  • Employee Provident Fund (EPF): EPF is a retirement savings scheme where both the employer and employee contribute a portion of the salary. The employer deducts the employee’s share and contributes its part to the EPF account.

What is the difference between Cost to Company (CTC) and in-hand/gross salary?

ParticularCost to CompanyIn-hand salary
Definition Cost to company also known as CTC is the total income provided by the company to the employee.In-hand salary is the net salary that employees get after deduction of all the taxes and other deductions.
ComponentsCTC is gross salary+Allowances+leave Travel allowance+Dearness Allowance etc.In-hand salary is Gross salary-Provident fund- Income tax-Professional tax
VisibilityIt is shown on the offer letter that employees receive during the employment contract.It is the salary that get credited in the employee’s bank account.

Frequently Asked Questions (FAQs)

How can I get my salary slip online?

Salary Slip is a monthly financial document that you get from your employer. It shows various components contributing to the final salary amount. It can either be sent by HR or can be downloaded from the central salary slip portal (ask your HR SPOC, in case you do not have the link to such a portal). You just have to log in to the portal using your credentials. In the profile section click on salary slip. Click on the payslip with the tax slip, and then you can view the desired month or year salary slip. After that you can click on the download button, enter the password and here is your salary slip.

Should I save my salary slips and store them in a safe place?

Yes, you should always download and save the salary slips in a safe place as they are important documents for various legal and professional matters.

Are handwritten salary slips legal?

Salary slips can be handwritten or electronic. Handwritten salary slips are as valid as electronic ones and can be produced for bank loans, proof of employment etc.

How can I make a simple salary slip?

To make a salary slip for your employees, you can use either Excel or special software. You put in details like how much they earn, what’s deducted, their EPF, and bank info. The software or Excel sheet does the maths and makes the salary slip.

Can I make my salary slip?

Companies or employers make the salary slip. Employees cannot make the salary slip of their own. Employers can use manual or online methods to make a salary slip. Employees can get access to the same either by downloading it from the portal or by getting it from the HR of the company.

How can I edit the salary slip in a PDF file?

Only the employer should edit a salary slip, not the employee. If an employee receives a wrong one, they must inform HR or management, as changing it themselves is not allowed. To fix any mistakes, they should request a corrected salary slip from HR or finance. The employer will then make the correction using their software or Excel and send the correct one to the employee, ensuring everything is accurate and legal.

Do banks ask for salary slips?

Salary slips are proof of the income and because of this reason banks can ask for the salary slip of the past few months. It’s generally required during the time of loan, borrowings etc.

How does a salary slip help to save my Income Tax?

Salary slips contain various components of income tax deductions such as House rent allowances, travel allowance, dearness allowance, leave travel allowance etc. Tax authorities allow companies to set up employee’s salaries in a way so they can reduce their taxes by including various benefits in their income. These benefits and tax deductions are listed on the salary slips, helping individuals save on Income Tax.

What is professional tax?

Professional tax is a state government tax that is levied on professional services such as lawyers, doctors, Chartered Accountant, freelancers etc by the state government under Article 246 of the Indian constitution. Maximum limit for the same is ₹2500/- and no one can charge the tax more than this.

Why is an understanding of Salary slips important?

Understanding salary slips is important to know your money/salary details. It’s evidence of the job and employment status. It’s also useful at times of getting loans, paying taxes and negotiating at times of new job opportunities.

What is the impact of Standard Deduction on Salary Slip?

Salaried workers can benefit from a standard deduction of Rs. 50,000. This deduction replaces the transport allowance and medical reimbursement previously included in the salary slip. It’s a helpful measure that lowers the tax burden for both salaried employees and pensioners.

Was this helpful?

Vaibhav Khandelwal

Credit Principal
Vaibhav is Chartered Accountant by profession, having experience of 4+ years in banking & finance sector. Since past one year associated with Wint Wealth as Credit Principal. Previously worked with Northern Arc Capital for 2 years in FI-Credit Team and AU Small Finance Bank for 1 year in LAP-Credit Team.

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