Understanding the Salary Slip – Pay Slip | Format, Download, Components




Every employee is entitled to receive a salary slip from his/her employer. This is a legal document which acts as proof of your employment. It’s an important document which has all important details about your salary like basic salary, medical allowance, conveyance allowance, deductions, and other information like your employee code, date of joining, and bank details etc.

It is imperative that you keep them safe since these are used to compute Income tax payable and also serve as an evidence of your claim to the Government (in case required). These can also be used to secure loans from banks and benefits of Government subsidies. These salary slips are handed out systematically either in an electronic mode or in paper mode. If it is in paper mode, make sure it is signed and stamped by your employer.


You can get your salary slips via different means which are mentioned below:

  • You can ask pay slips from your HR/Admin of your department
  • If your salary directly gets credited in your bank account, in that case, you can ask your bank to provide you with a salary slip
  • Or you can ask the person who manages the salary for all at your workplace

Importance of Salary Slips:

As mentioned above, your salary slips are of great worth as it contains all the information about your salary, it’s break up and the deductions. So it is recommended that you understand your salary slips and the importance attached to it.

  • Income Tax Payable

Your salary slips determine the amount that needs to be paid as income tax and the claims that you can file for income tax returns.

  • Loan or Credit Card

If you are applying for a loan or credit card, the bank will ask for your payslips and verify if you are eligible for the loan amount you have applied for.

  • Increment Proof

Your salary slips also play an important role in determining your salary. For example: if you are changing your job, then your new employer will ask for your salary slips. Your pay will be determined on your salary slips.

  • Alimony Ground

In cases of divorce, alimony is determined on the basis of husband’s/wife’s salary slips.

  • Government subsidies

Salary slips also entitle you to benefit from government subsidies in medical care or in the public distribution system of food.

  • Visa Application

In some cases, while applying for visas or for universities, you might have to furnish your salary slips are they are legal proof of your employment and position held.


Structure and Components of Salary Slips

Salary Slip sample

The above image displays how a standard salary slip looks like. As you can see, there are many terms and sections referred to on the slip. To understand them all, refer to the ‘Components’ section below.


Components of a Salary Slips:

As you can see, the salary slip is divided into two sections: Earnings and Deductions. So we will study the components of both the sections separately.

Earnings/Income:

  • Basic Salary:

This comprises approximately 40% of your total salary and is the most important component. Although, the percentage of the basic salary varies from company to company. All the other components mentioned on the salary slips are based on your basic salary. Basic salary is 100% taxable.

  • Dearness Allowance:

The major objective of this allowance is to sublime the effect of inflation on the employee. This allowance is directly related to the employee’s cost of living and differs from employee to employee. For salaried employees, its fully taxable.

This allowance is paid to help the employees in paying their rent. The allowance percentage depends on the location. For example, for metro areas, the allowance is 50% and for other regions, it is 40%. This allowance is also taxable but qualifies for tax exemptions under certain circumstances like you should actually be paying the rent and should possess supporting documents like lease agreement/ rent receipts/ PAN of the owner.

  • Conveyance Allowance:

This is given to the employees to reduce their commuting cost between home and office. It’s paid on the monthly basis and is not taxable. Sometimes, it is added in your cash in hand amount but it mostly depends on how much you spend on the transportation and if you have receipts to prove it.

This allowance covers the travel cost for the employee and their immediate family while they are on leave. However, this facility is offered only once in two years and does not include your accommodation and food. You need to provide your employer with valid documents proving your travel.

  • Medical Allowance:

The company tries to cover your medical expenses while you are employed with them. It’s not an advance payment but is reimbursed if you provide sufficient receipts like medical bills. The reimbursement amount differs from company to company but an approximate amount of Rs. 15,000 is provided and is tax-free.

Budget 2018 discontinued the tax benefit of maximum upto Rs 15,000 in respect of medical allowance and transport allowance. But, to the relief of tax filers a new deduction in the name of standard deduction for all salaried employees have been introduced. Standard deduction is allowed at Rs 40,000 for all employees irrespective of actual amount spent.
Interim Budget 2019 increased the limit of standard deduction to Rs 50,000.
  • Performance Bonus:

Incentives and encouragements are always healthy for the employees. However, this allowance is 100% taxable and are paid once or twice in a year.

  • Other Allowances:

These allowances vary from company to company. These could be paid by the employer for any reason and such types of allowances are clubbed under ‘Other allowances’. Although, if the employer wants, he/she can create a different slab for such allowances.


Deductions:

All deductions under chapter VI A i.e. deductions allowed in respect of most popular investment options under section 80C, 80D till section 80U is mentioned under this head.

At least, 12% of the employee’s salary goes to the Provident Fund which is the accumulation of funds for employee’s retirement period. This amount does not fall in the tax bracket and earns interest on the contributions made by the employee and the employer.

  • Professional Tax:

It is a state levied tax and is applicable only in a few states: Karnataka, West Bengal, Andhra Pradesh, Telangana, Maharashtra, Tamil Nadu, Assam, Gujarat, Chattisgarh, Meghalaya, Kerala, Orissa, Tripura, Jharkhand, Bihar and Madhya Pradesh. It is calculated on the basis of employee’s tax bracket and is taken from your taxable income.

You get your salary after your employer has deducted TDS on behalf of the Income Tax Department. If you wish to reduce the tax computed on your salary, you can invest in tax saving schemes and furnish the documents to your employer so that they can revise the tax payable.


Downloading Payslips:

For Tata Consultancy Services Employees:

All the employees of the Tata Consultancy Employees (TCS) can access their payslips via TCS Enterprise Resource Planning (ERP), ‘Ultimatix’. The employees can access the portal from the link: https://www.ultimatix.net/. It is available as a portal as well as an app for both IOS and Android softwares. The portal has an updated interface which makes it easy for the employee to access helpdesk either via email or call.

Ultimatix:

It’s an employee dedicated portal which can only be accessed by the employees of the TCS. This portal is beneficial in various ways and some of them are mentioned below:

  • It can be used to fill a timesheet.
  • Employees can access the company’s policies, code of conduct etc.
  • Can be used to apply for different claims.
  • This platform can also be used to raise work-related issues.
  • An employee can also apply for leave via this app.
  • Can access salary slips and other work-related documents.
  • It also has instant messaging app ‘sametime’ and a knowledge sharing platform ‘Knowmax’. Both these platforms are used by the employees to stay connected and to keep sharing knowledge.
  • Other important documents like the bonafide letter, joining letter, and offer letter can also be accessed using this portal/app.
  • The portal can also be used to check for upcoming projects and opportunities.

To access payslips in Ultimatix, follow the steps mentioned below:

  • Either go to the online portal by clicking the link mentioned above or download the app

The online portal should look similar to the picture attached below:

  • Log in using your username and password
  • Post-logging in, go to ‘Employee services’ >> ‘My documents’ >> ‘Salary slips

If you are no longer employed at Tata Consultancy Services and wish to retrieve previous pay slips, then fret not. There is an ‘Alumni Portal’ from where you can access your previous pay slips. You can visit the alumni portal by clicking on the link mentioned: https://www.alumniportal.tcs.com.

  • Log in using your access credentials.
  • From your account, you can check payslips for the last 6 months of your employment along with total Provident Fund settlement and a copy of the final settlement with the Tata Consultancy Services.

For Wipro Employees:

Like Tata Consultancy Service, even Wipro has an online portal and an app for IOS and Android users. This portal is known by ‘myWipro’ and has app in the same. In 2016, Wipro Limited was conferred by ‘CIO 100’ by IDG CIO for its digital platform, ‘myWipro’. It was conferred to Wipro Limited because they displayed exemplary operational and strategic excellence in the IT sector.

You can access the online Wipro portal by clicking on this link: https://wipfs01.wipro.com/adfs/ls/idpinitiatedsignon

You should see a screen similar to the one shown below.

myWipro:

It’s a self-service portal designed especially for the employees to experience the best of the technology sector. It comes with a good interface which makes it easy for the employees to toggle with the tabs and various processes. This portal uses predictive analysis and artificial intelligence for easy transactions, improves accuracy and improves the overall user experience. Amongst many, some of the advantages of using this portal are mentioned below:

  • Employees can apply for leave using this portal.
  • They can update their time-sheets and fill in work hours and attendance.
  • Employees can also put in travel requests using this portal.
  • The employee can connect to other Wipro employee using this portal.
  • This portal can also be used to check the upcoming projects and can also put in a request to get tagged in any project.

To access payslips via the myWipro app, follow the steps mentioned below:

  • Go to the app and follow these steps: my financials >> reports >> payslips

If you are no longer associated with Wipro, you can still access your documents related to your employment at Wipro from the ‘Wipro Alumni Circle’.  You can access the online alumni network by clicking on the link attached: https://myapp.wipro.com/xemp/index.html


Common FAQs:

Is it important to keep Salary slips safe?

Yes, it is important to keep your salary slips safely as they are proof of your employment and the salary paid. These salary paid are also used for various purposes like applying for bank loans, credit cards and for mortgage.


How to make a Payslip?

Employer can make the payslip after consulting either their HR or the company’s CA. They will be able to furnish the complete information regarding ‘Cost to Company’ which will be added in the payslip.


Does basic salary remains stable throughout the term of employment?

The amount computed by the employer remains the same. However, the actual paid at the end of the month depends upon the number of work days put in by the employee. The final amount is calculated by taking attendance, paid leave and unpaid leave into account.


How is take-home salary calculated?

Take your gross salary and deduct your Provident Fund contribution, along with Income Tax and professional tax if it is levied in your location.


How much tax is liable on the different tax slabs?

Salary up to Rs. 2.5 lakhs is exempted from the tax bracket. 5% tax is applicable for people with a salary between Rs. 2.5 lakhs to 5 lakhs. 20% tax rate is liable on Rs. 5 lakhs to Rs. 10 lakhs tax slab and 30% for people with a salary above Rs. 10 lakhs.


What is a casual income?

Casual income is income generated/earned at an unusual time. Such income is not included in any agreement and has a negligible possibility of recurring in a year. This income is taxable and is categorised under ‘Other Income Sources’.


What is the difference between ‘Cost to Company’ and ‘Gross Salary’:

You must have noticed that there is always a difference between the salary that is agreed during hiring and the salary which is paid at the end of the month. This is because the salary that is agreed upon is divided under various tax structures and the remaining amount is credited to the respective bank accounts.

‘Cost to Company’ is the amount that the company decides to pay its employees in one year. This includes reimbursements, contributions to the Provident Fund, salary and tax related benefits. Whereas ‘Gross Salary’ is the amount entitled to you but without any deductions. This amount is the amount which is committed to you by your employer. But this does not include your contributions to Provident Fund but comprises of basic salary, travel allowance, house rent allowance, dearness allowance amongst other categories.


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Team Tax2Win