What a salary slip includes
A payslip shows how the month’s pay was worked out. It has:
- The company name and address, and the month
- The employee’s name, ID, designation, PAN, UAN and bank account
- Days in the month, paid days and loss of pay days
- Each earning, such as basic, HRA and allowances
- Each deduction, such as PF, ESI, professional tax and TDS
- Net pay in figures and in words
Common deductions on an Indian payslip
- Provident fund (PF): 12% of basic pay. Many companies use basic up to ₹15,000 a month, so ₹1,800 at most.
- ESI: 0.75% of gross pay, for employees earning up to ₹21,000 a month.
- Professional tax: set by each state. Karnataka, for example, takes ₹200 a month from salaries of ₹25,000 or more.
- Income tax (TDS): worked out on the year’s taxable income and spread over the months.
How net pay is worked out
Net pay is gross earnings minus total deductions. If someone took unpaid leave, lower the earnings first. Divide each monthly amount by the days in the month and multiply by the paid days.