What is the Salary Slip?
The employer issues a salary slip to the employee. In the salary slip, all the details about the employee’s salary are mentioned. The details are like HRD, LTA, bonuses and other salary-related things mentioned in the document. In the salary slip, the deductions are also mentioned in the salary of the employee. It is mandatory to issue the salary slips to the Employees by the employers so that they can maintain the updated records of their salary. Plus, the deductions also come in considerations.
What is the Importance of the Salary Slip?
Basis for Income Tax Payment
For the income tax calculation, the salary slips are required. Salary slips help to maintain the income tax calculation. With the help of the salary slip, the tax department can identify how much refund is to be given to the employee.
Access to Plenty of Amenities
- The salary slip allows the employee to attain free facilities such as medical care, food grains subsidy, etc
- With the help of the salary slip, the lender can be proven trustworthy. The salary slip helps to certify that their lending amount will be repaid by the person. The salary slips are required to get loans from banks
- Required for employment proof
- When it comes to applying for a new job or going out of the country, then the salary slip is the proof of the employee, that he has worked in the company
Components of the Salary Slip
The elements of salary slips include Incomes and Deductions:
In the Income section, there are several parts to be added, such as:
- Basic salary, in which it comprises 35% or 40% of the total salary
- Dearness Allowance (DA), which helps to know about the allowance paid to the Employees to reduce the impact of inflation
- House Rent Allowance (HRA) which is paid to the Employees. The house rent allowance is decided as per the location of the house
- Conveyance Allowance which helps to cover the travel cost from work to home
- Leave Travel Allowance which covers the travel expenses of the employee and his family when they are on leave
- Medical Allowance, in which the employee is given medical expenses, while he is in employment
- Bonus Allowance is given to the employee to encourage them to work
- Many other allowances are given to the Employees, which are according to their designation
- Provident Funds needed to be conducted from the monthly salary of an employee
- Professional Tax is also deducted from the monthly salary of an employee, which is according to the Income tax slabs
- On the basis of other factors, TDS is also deducted from the amount of salary of the employees, which is deducted by the employers on behalf of the Income tax department.