Difference between payslip and salary slip

The maximum amount payable per year is Rs. It is charged by the state government in order to let an individual practice a certain profession. The components that form part of the Deductions side of the salary statement are: 1. This allowance does not fall in the category of perquisite and is partially taxable. Special AllowanceР”Р„ special allowance is paid to an employee for the performance of a duty mentioned under section 14 (i). 15,000 per year, the same becomes taxable. This is an allowance provided by the employer when the employee or any of his family members fall sick for the cost incurred on their treatment. Any expense over and above that is taxable. 19,200 annually) is provided to the employees for commuting from home to office and vice-versa. This is basically given to individuals who live in rented houses with the intention of making it easier for them to afford a place of accommodation. HRA is an allowance that is paid by an employer to the employee as a part of the latterРІР‚в„ўs salary. According to the Income Tax Act, the entire amount of DA received is taxable and has to be declared at the time of filing income tax returns. It is generally paid in the form of a fixed percentage of basic salary. The purpose behind providing this allowance is to reduce the impact of rising inflation. Dearness AllowanceР”Вearness Allowance (DA) is given by certain employers to their employees, compensating them for an increase in the cost of living. It excludes bonuses, overtime pay or any other compensation from an employer. Basic SalaryР”В«asic Salary is the amount that an employee receives prior to any extras being added or payments deducted. The components that form part of the Income/Earnings side of the salary statement are: 1.

Total Work Days, Effective Work Days, Number of Leaves.

EPF Account Number, UAN (Universal Account Number).

Employee PAN/Aadhaar, Bank Account Number.

Employee Name, Employee Code, Designation, Department.

Company name, logo and address, current month and year.

Following is a basic template for a salary slip that includes:

It is to be noted that different companies follow different formats of salary slips. * The above format is just an illustrative example and your salary slip may include or exclude some of the components shown in the example. Before reading the detailed of income part of the salary slip and the deductions adjusted, let us have a look at the sample salary slip: Salary Slip Format in India The components primarily fall under two categories: Income/Earnings and Deductions. The net pay is calculated on this amount.Р”Р„ salary slip or payslip will have basic information like company name, employee name, designation and employee code, etc. However, it is inclusive of bonuses, overtime, etc. Gross Salary is the amount before deductions of taxes and others. Below is the break of his cost to the company : LetРІР‚в„ўs understand the difference between cost to company and take-home salary with the following illustration. In other words, Gross Salary is the amount paid before the deduction of taxes or deductions and is inclusive of bonuses, overtime pay, holiday pay, etc. The amount received post subtracting gratuity and the employee provident fund (EPF) from Cost to Company (CTC) is called Gross Salary. It is variable and depends on several factors which in turn affect the net salary. CTC consists of salary, pension, PF contributions, allowances, etc. It is the amount spent on hiring and reimbursing for the employeeРІР‚в„ўs services. Here are the major differences between the two: Cost to Company (CTC)Р”В¬TC can be defined as the total amount an organization spends on an employee during a given year. They can instead invest the same in high yielding investments. Employees do have an option to opt-out of some of these forced savings.

Better Understanding:Р”Р„ salary slip has components which are forced savings like EPF and ESI. Having knowledge of salary slips and their components can help an employee take advantage of the tax deductions available, hence allowing them to plan their taxes efficiently. It also acts as a negotiating agent for salary hikes while changing new jobs. Choosing the next job smartly:Р”Р„ salary slip assists in choosing jobs smartly from different companies while switching jobs. It is very important to understand salary slips and their components as it can help employees take advantage of the situations around them: 1. It also helps in filing income tax returns and applying for loans and mortgages and negotiating for a salary hike when applying for a new job. Also, the salary slip acts as proof of employment. A Salary Slip or Payslip is legal proof of income for an employee.

Difference between payslip and salary slip