Salary slip, also known as pay slip, is given to every employee of companies small and large. Some employers issue the pay slip on paper while others email it to staff. Yet others get it by post.
Salary slip carries details about your earnings for any particular time period. Some get a salary slip every month, others every fortnight and many, every week.
However, most of us dispose a salary slip without giving it the due importance. Mainly, because all we want to know is the money we made and how much went to deductions of various types.
What is Salary Slip / Pay Slip?
A salary slip is also known as pay slip in some countries. Understandably, because salary slip is given to employees whose monthly pay and allowances are known.
Pay slip salary, in comparison, is given to workers whose income and allowances can vary according to number of hours or days they work. Regardless, they both indicate your earnings.
Importantly, a salary slip is a vital legal document too. Moreover, it is legally binding upon your employer to issue you a salary slip as proof and statement of your earnings and deductions if any.
It is compulsory for you to endorse the salary slip to acknowledge you have got the money it mentions.
Getting a salary slip or pay slip
It is your legal right to ask and get a original salary slip or pay slip. Of course, you may be working for a very small firm or private employer. However, you can always request your employer for some form of a salary slip.
The employer may hand you a simple paper indicating your salaries or wages, days worked and deductions if any. However, this is more than sufficient, as long as it is signed and stamped by your employer.
Alternatively, you can get your simple salary slip from these sources:
- Human Resources/ Finance/ Administration department of your employer.
- Payroll service provider who manages salaries and wages for your employer on outsourcing basis.
- Your bank can also give your pay slip if your earnings go directly into your bank account. However, it will only indicate a salary transfer without much detail.
Importance of a salary slip
Your salary slip is important for many reasons. Therefore, it is essential to obtain one every month. Further, you also need to file your pay slips carefully for future reference.
1. It will decide whether or not you will pay income and other taxes. Your salary slip will also help fix how much money you will pay as taxes every year. In addition, you will know how much income tax returns you can claim from the government.
2. The salary slip also ensures access to certain services from the government that are given free or with heavy subsidy. This will include state-run medical care and cheaper food grains from public distribution system.
3. Further, bank credit, loans, housing mortgage and other borrowings you can avail is decided by the salary slip. Banks and lender institutions will definitely ask for copies of salary slip while applying for credit or loan. Pay slips help banks assess your creditworthiness and repayment capability.
4. A pay slip plays role of a bargaining chip when negotiating salary with a new employer. Large companies ask for copies of the last salary slip as proof of your earnings. It helps them decide how much to pay you.
5. Unfortunately, salary slips work sometimes against income earners facing divorce proceedings. For males, it will be used to decide how much alimony to pay. In the case of women, the alimony and compensation they get will be based on the husband™s salary slips.
6. Some Arabian Gulf countries, a salary slip decides whether or not you should get a liquor permit. In these countries, it is illegal to buy alcohol without the liquor permit. Unless you earn the specific amount or more, you will not get a liquor permit.
Salary slip format and info
For newcomers, reading a salary slip can be daunting. It can be equal to deciphering hieroglyphics. Yet, here are some basic indicators about some of the information your salary slip will contain. The information will vary by employer and country.
- Number of days/ hours of your work
- Number of days you did not work
- Official holidays ( Festivals, national days and weekends)
- Basic Salary
- Housing and Residence Allowance
- Transport/ Commute Allowance
- Medical Allowance
- Outstation Allowance
- Payment for overtime work
- Extra pay for any reason
- Dearness allowance
- Tax deductions
- Social Security/ Provident Fund deductions
- Workplace/ group accident cover deductions
- Medical and healthcare insurance deductions
- Advance payment/ adjustments on loans
Salary Slip Format
More info on your salary slip
The salary slip in India gains more significance because of many reasons:
- It bears your full name, or your legal identity
- In most cases, your full residential address will appear on salary slip
- Your designation with the particular employer
- Employee number in the company
- Grade and ˜rank™ if any. The ˜Grade™ and ˜Rank™ system isÂ to indicate seniority and pay scale. Often, government offices and departments, armed forces will use this system.
- Details about payment. This means the total amount paid. Further, it will indicate mode of payment- cash, cheque, bank transfer.
Computerized and manual salary slips
Obviously, manually issued salary slips are things of the past as one will believe. Yet, some employers do issue them. They serve two purposes- as original salary slip and receipt of payment.
In some countries, one has to affix a government revenue stamp to a salary slip. Further, they bear the company™s official stamp and signature of the issuing officer.
However, most companies issue digital salary slip which in other terms called e salary slip. You can have them printed or stored for your future reference. Further, if you require, you can get endorsement from the employer.
Legal validity of manual, digital pay slips
Luckily, both have the same legal status. Remember, you cannot tamper with your salary slip. It can become a criminal offense to alter or doctor a pay slip.
This can happen if you approach a labour court for resolving a salary or wage dispute. Incidentally, such cases are few now because of computerization and bank transfer of salaries.
Foreign salary slips
Regardless of whichever country your salary slip comes from, it has the same legal status. Salary slips from foreign countries can help you open an offshore banking account.
It can also give you the ˜Non Resident™ status in your native country. Especially, a ˜Non Resident™ status is useful to save taxes.