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Every salaried person receives salary slips periodically, but most of them don’t know the importance of this document. In this article, we will explore the following topics:
A salary slip is a document issued by an employer to an employee. It contains a detailed description of the employee’s salary components like HRA, LTA, Bonus paid etc and deductions for a specified time period, usually a month.
It may be issued on paper or mailed to the employee. Employers are legally bound to issue salary slips to their employees periodically, as proof of salary payments to employees and deductions made.
Salary Slip – Sample Template
The salary slip forms the basis for income tax calculation. It helps to prepare the income tax returns and determine how much tax is to be paid or how much refund is to be claimed by the employee for the year.
The salary slip gives employees access to various free or subsidised facilities provided by the government such as medical care, subsidised food grains, etc.
Salary slips provide lenders with assurance that their lendings will be repaid. It is an important document to avail loans, credit, mortgage and other borrowings.
Employees can compare offers from new employers based on their previous salary slips. It also helps them negotiate salary with new employers or for new roles.
Salary slips are important legal evidence of employment. Often, while applying for travel visas or to universities, applicants are asked to furnish a copy of their salary slip as proof of employment and designation.
Components of a salary slip can be understood in two parts:
The following components appear under the incomes part of the salary slip:
The following components appear under the deductions part of the payslip: