Managing payroll is crucial if you are a business owner or an employer. This includes knowing how to make a salary slip that is easily comprehended and captures all the essential payment-related details. Not only do your employees expect to be paid on time and all they are owed, but India's workforce rules and regulations also mandate it.
There is no fixed template for a salary slip, so you can find a broad range of samples online when you search ‘how a salary slip looks like’. With so many options, deciding which template to follow for your employees can get a little overwhelming. This article will show you a simple salary slip format that takes the least effort and can be easily used in your company.
Typically, employees have a CTC – cost to the company – associated with them. This is an overall figure that comprises the following key salary components.
In most companies, basic salary makes up almost half (40 - 50%) of the salary paid to the employees. Not only is it the largest salary component, but it also directly/indirectly has a bearing on other aspects such as PF, HRA, etc.
Employers offer various allowances to attract talented workers. Some of them are tax-exempted and can contribute to increasing your net take-home salary. Popular types of allowances include:
It's a competitive recruitment landscape today. While a fair-market salary and allowances are all fine, employees also expect performance-linked incentives, bonuses, or perks. The amount may be a percentage of the overall CTC or a fixed amount paid out each quarter or at the end of the financial year. Perquisites can include rent-free accommodation or reimbursement of rent paid, furniture allowance, payment of utilities, and even stock options.
While making a salary slip, not only is it important to capture all the payments made to the employee, but it is equally important to record the deductions. These are often tax deducted at source (TDS) and retirement contributions such as provident funds or pension plans.
If you cover all the applicable components, you can manually design a salary slip using software like MS Excel or MS Word. Or, you can leverage one of the many salary slip generator tools available online. These tools come with a high degree of customisation and can reduce your workload while ensuring accuracy and efficiency. However, they may come with a usage cost or a paid license.
Once you’ve decided which tool to use, here’s what a salary slip should look like.
Note: this annual salary breakup covers your employee’s cost to your company. Divide each component by 12 to get a monthly salary slip. All salary components paid to employees (S. Nos. 2-6) should be captured on the left-hand side of the salary slip. The deductions (S.Nos. 7-8) are displayed on the right. The difference between the total of all entries on the left and the right is the net salary paid to the employee.
Apart from this, an ideal salary slip should also cover the following information for the employee:
Your company’s basic information should also be mentioned on the salary slip, including:
Now you know how to make a salary slip that complies with the pertinent rules and regulations while making it easy for your employees to understand their salary structure. Your employees can open a salary account with Fi Money. Fi, along with its licensed partner Federal Bank, offers a salary account that comes with numerous benefits. When you shop using Fi, whether through UPI or a Debit Card, you will receive 2% cash back. Additionally, you will earn 4x Fi-Coins on all your transactions via Fi, which you can redeem for vouchers, merchandise, and more. You can also access exclusive deals and gift cards from top brands like Amazon and Swiggy.
Other benefits of the account include no minimum balance requirements, a free VISA Platinum debit card with zero forex charges, priority customer service, and more. As a joining bonus, you will receive a ₹500 Amazon voucher.
Fi provides various features to help you manage and grow your money, such as Connected Accounts, Analyser, Goal-based saving, SIPs, and automatic payments.
Designing clean and simple salary slip formats entails capturing all the necessary information in an easy-to-read manner. A simple salary slip format lets you comply with legal requirements and regulations related to salary and wage payments while ensuring your employees are clear regarding the payments and deductions made.
Using a minimalistic and simple salary slip format can help you save time and effort in its preparation. It also reduces the chances of errors more likely to happen with complex formats. The employees easily understand the salary structure, reducing the chances of ambiguity or disagreement regarding payments.
Using a clean and simple salary slip format can benefit employees and employers in several ways. Employees can easily understand their earnings, deductions, and other benefits leading to fewer disputes or grievances with the employer. It saves you time and effort while ensuring compliance with the law. It also fosters a culture of trust, transparency, and open communication between you and your employees.
