What is a Salary Slip?

A salary slip, also known as a payslip, is a document detailing an employee’s salary breakdown for a specific pay period, including earnings, allowances, and deductions. Read the full blog to know more.
Home Loan
2 min
12 May 2025
Have you ever wondered what that piece of paper with your pay details is all about? A salary slip is more than just a record of your monthly income. It is a vital document that plays a key role in your financial life.

Salary slips show how much you earn and what gets cut from your pay. They are proof of your income when you need loans or visas. They also help you file taxes correctly. This article will tell you all about salary slips and why they matter.

What is a salary slip?

A salary slip is a document given by your employer that shows your pay details for a set time period. It lists your total earnings and all the money taken out of your pay such as taxes and other costs.

Salary slips are also called pay slips or wage slips. They serve as proof of your income and help you see where your money goes each month. Knowing what is a salary slip and how to read it can help you manage your money better.

Many banks ask for salary slips when you apply for loans. This is how they check if you can pay back the money. Want to know if you are eligible for a home loan? Check your eligibility now by entering your mobile number and OTP. You may already be eligible for a Bajaj Housing Finance Home Loan with interest rates starting from just 7.99%*  p.a..

This article will explain salary slip formats, what they contain, and why they are so vital for your financial health.

Standard salary slip format

A standard salary slip has a set layout that shows your pay details in a clear way. It has your basic info, the pay period, and a breakdown of your earnings and cuts.

Most salary slips include these main parts:

SectionDetails Included
Employee informationName, ID number, job title, department
Employer informationCompany name, address, tax ID number
Pay periodStart and end dates of the pay period
EarningsBasic pay, allowances, bonuses, overtime
DeductionsTaxes, insurance, pension, loans
Net payFinal amount after all deductions


The format may look a bit different from one company to another, but the key parts stay the same. Knowing this format helps you check if your pay is right each month.

Salary slip format for Excel

Many firms use MS Excel to make salary slips as it is easy to use and can do math quickly. An Excel salary slip format has the same parts as a standard one but is set up as a spreadsheet.

Here is how a basic Excel salary slip might be set up:

FieldDetails
HeaderCompany name, logo, address
Employee detailsName, ID, department, bank details
Salary periodMonth and year
EarningsBasic pay, HRA, DA, other allowances
DeductionsTDS, EPF, insurance, loans
SummaryGross pay, total deductions, net pay


Excel makes it easy to add up all the numbers and work out the final pay. It also lets you save and print the salary slip in a neat way. This format is perfect for firms with a small number of staff.

Salary slip format for Word

MS Word is also used to create salary slips, and it offers more options for design. A Word salary slip can look more formal and can include the company logo and other design elements.

The MS Word salary slip format might include:

ComponentDescription
HeaderCompany details and logo
Employee sectionPersonal and job details
Salary detailsMonth, days worked, leave taken
Earnings columnAll income components listed out
Deductions columnAll cuts listed with amounts
Net payFinal pay amount in numbers and words


Word lets you make a more custom look for your salary slips. You can add your brand colours, fonts, and styles to match your company's look. This format is good for firms that want their salary slips to look more formal.

Components of a salary slip

A salary slip has many parts that show different aspects of your pay. These help you understand how your final pay is worked out. Let's look at the main parts.

The key components of a salary slip include:

  • Basic pay - The main part of your salary before any extra money is added
  • Dearness Allowance - Extra money to help with rising costs of living
  • House Rent Allowance - Money to help pay for your housing
  • Other allowances - Extra payments for things like travel or food
  • Tax Deducted at Source - Income tax taken out of your pay
  • Professional tax - A tax some states charge on certain jobs
  • Employees' Provident Fund - Money put aside for your retirement
  • Labour Welfare Fund - A small sum for worker welfare schemes
  • Employees' State Insurance - A health insurance scheme
Each of these parts plays a role in how much money you take home. Let's look at each one in more detail.

Basic pay

Basic pay is the core part of your salary. It is the fixed amount that forms the base for working out other parts of your pay. Your basic pay is set out in your job offer or contract.

Basic pay is often about 40-50% of your total pay. Other allowances and benefits are worked out as a percent of this basic pay. For example, your House Rent Allowance might be 40-50% of your basic pay.

Your basic pay shows your main value to the company. It rises as you get more skilled and take on more tasks. It's also the main part used to work out your pension benefits when you retire.

Dearness Allowance (DA)

Dearness Allowance is an extra payment that helps deal with the rising cost of living. It tries to keep your buying power the same even when prices go up. DA is often paid as a percent of your basic pay.

DA rates change based on inflation. The government and firms review DA rates now and then, and may raise them if living costs go up a lot. This helps make sure your real income does not drop due to price rises.

DA is more common in government jobs than in private firms. In private jobs, this amount might be part of the basic pay or other allowances. DA is taxed just like your basic pay.

House Rent Allowance (HRA)

House Rent Allowance is money given to help with your housing costs. HRA is a key part of most salary slips and can help you save on tax if you pay rent. The amount is often 40-50% of your basic pay.

HRA is good for tax savings. If you pay rent, you can claim tax breaks on HRA under certain rules. The tax break you can get is the least of:

  • The actual HRA you get
  • Rent paid minus 10% of your basic pay
  • 50% of basic pay in metros or 40% in other cities
Keep your rent receipts to claim HRA tax breaks. If you own your home or don't pay rent, you can't claim tax breaks on HRA. You'll need to pay tax on this part of your pay.

Are you considering applying for a home loan? Banks need your salary slip to verify your income. Check your eligibility for a Bajaj Housing Finance Home Loan today by entering your mobile number and OTP. You could get a loan of up to Rs. 15 crore* with interest rates starting at just 7.99%*  p.a..

Other allowances

Other allowances are extra payments for specific needs or costs. These might include things like:

  • Transport Allowance - For travel to and from work
  • Medical Allowance - For health care costs
  • Food Allowance - For meal costs
  • Special Allowance - A catch-all term for other extra pay
These allowances can vary a lot from one job to another. Some may have tax breaks, while others are fully taxed. For example, transport allowance up to a certain limit is tax-free.

Each firm might have its own set of allowances based on its pay policy and the types of jobs. These make up a key part of your total pay beyond just the basic salary.

Tax Deducted at Source (TDS)

Tax Deducted at Source is the income tax your employer takes out of your pay before giving it to you. This is a way for the tax office to collect tax during the year instead of all at once.

Your employer works out how much TDS to take based on how much you'll earn in the year and any tax-saving steps you've taken. They send this money to the tax office on your behalf.

At the end of the tax year, your firm gives you a Form 16. This shows all the TDS taken from your pay. You use this when filing your tax return. If too much tax was taken, you can claim it back.

Professional tax

Professional tax is a state tax on job income. Not all states have this tax, and the rates vary from state to state. Your employer takes this tax from your pay and pays it to the state government.

The maximum professional tax in a year is Rs. 2,500. It's a small amount but it's a legal duty to pay it in states that charge it. Your salary slip will show the amount taken for this tax.

Professional tax is a cost you can claim as a cut when filing your income tax. It's not a big amount, but every tax break helps reduce your total tax bill for the year.

Employees' Provident Fund (EPF)

Employees' Provident Fund is a plan that helps you save for your future. Both you and your employer put money into this fund. The most common rate is 12% of your basic pay from each side.

The money in your EPF grows with interest over the years. You can take it out when you retire or in some special cases before that. It's a good way to build a nest egg for your later years.

Your EPF deductions show on your salary slip each month. You can check your total EPF balance online using your Universal Account Number (UAN). This is a key long-term saving tool for many workers.

Labour Welfare Fund (LWF)

Labour Welfare Fund is a small sum taken from your pay to help fund worker welfare schemes. Both you and your employer pay into this fund. The amount is very small, often just a few rupees per month.

LWF is used to fund things like worker health schemes, training programs, and other welfare steps. It's a way for all workers to help support the wider worker community.

This deduction is so small you might not even notice it on your salary slip. But it's part of the legal rules in many states. The fund helps ensure all workers have access to basic welfare services.

Employees' State Insurance (ESI)

Employees' State Insurance is a health insurance scheme for workers. If your pay is below a certain level, both you and your employer pay into this scheme. The worker pays 0.75% of their pay, and the employer pays 3.25%.

ESI gives you and your family access to medical care at ESI hospitals and clinics. It also provides some pay if you can't work due to illness or injury. It's a safety net for workers on lower pay.

Your salary slip will show the ESI deduction if it applies to you. This scheme is run by the government and applies to firms with more than a set number of workers. It's a key social safety net for many workers.

Home loan insurance benefits

While we are on the topic of your salary and financial planning, let's talk about how your salary slip can help you secure a home loan. Your salary slip is a key document when applying for a home loan, as it proves your income and ability to repay.

Here are some benefits of home loan insurance that protect both you and your lender:

  • Debt protection: Pays off your loan if you pass away
  • Disability cover: Helps with payments if you become disabled
  • Job loss cover: Provides temporary payment support if you lose your job
  • Property damage cover: Protects against damage to your home
Having these insurances can make it easier to get a home loan and might even help you get better terms. They give peace of mind that you won't lose your home due to unexpected events.

Bajaj Finserv offers home loans with competitive interest rates starting at just 7.99%*  p.a. Want to know if you qualify? Check your eligibility by entering your mobile number and OTP. You may already be eligible for a loan up to Rs. 15 crore* with a flexible repayment period of up to 32 years.

7 essential elements to include on a payslip

A good salary slip should have all the key info needed to understand your pay fully. Here are seven must-have elements:

  • Company and employee details: Full names and contact info of both parties This helps identify who the slip belongs to and who issued it.
  • Pay period dates: The exact time period the payment covers This clarifies which work period is being paid for.
  • Gross salary breakdown: All the different parts that make up your total pay This shows how your total pay is calculated before any deductions.
  • All deductions with reasons: Each amount taken out of your pay with clear labels This explains where your money is going when it's deducted.
  • Tax deductions: Clear listing of all tax amounts taken This helps you track your tax payments throughout the year.
  • Net pay amount: The final amount you actually receive This is the bottom line - what actually goes into your bank account.
  • Payment method details: How and when the money will be paid to you This confirms how you'll receive your pay.
These elements ensure you can fully understand your pay and check that everything is correct. A clear salary slip helps avoid confusion and makes sure you know exactly what you're being paid for.

Importance of payslips for employers

Salary slips aren't just vital for workers - they're crucial for employers too. Here's why employers should take salary slips seriously:

  • Legal compliance: Many countries require employers to provide salary slips This helps businesses avoid fines and legal troubles.
  • Reduced disputes: Clear records of payments and deductions prevent disagreements This saves time and maintains good work relations.
  • Tax documentation: Proper records make tax filing easier for the business This ensures accurate reporting to tax authorities.
  • Budget management: Tracking salary costs helps with financial planning This gives a clear picture of one of the biggest business expenses.
  • Building trust: Transparency about pay helps create trust with workers This improves workplace morale and satisfaction.
Employers who provide clear, detailed salary slips show their commitment to good business practices. It helps maintain good records and builds a better work environment based on trust and clarity.

How to download payslips

Most firms now provide digital salary slips that are easy to access and store. Here's how you can usually download your payslips:

For company portals, log in to your employee account using your username and password. Look for a section called "Payroll" or "Salary" or "My Pay." Select the month you want, and download the PDF file.

For e-mail systems, check your work email around payday for an email with your salary slip. It might be password-protected - often with your employee ID or birth date. Open the attachment and save it to your computer.

Always store your salary slips safely, as you'll need them for loans, tax filing, and other financial matters. Create a specific folder on your computer or in the cloud to keep them organised.

Planning to buy a dream home? Your salary slips can help you qualify for a home loan. Check if you're eligible for a Bajaj Housing Finance Home Loan with interest rates starting from 7.99%*  p.a. Just enter your mobile number and OTP to find out. You may already qualify for a loan up to Rs. 15 crore* with flexible repayment options.

How does standard deduction reduce taxable income?

Standard deduction is a flat amount that reduces your taxable income. It was set at Rs. 50,000 per year under the old tax system, but the new tax system from 2023-24 raises it to Rs. 75,000.

This deduction replaces the earlier transport and medical allowances. You don't need to show any proof to claim it. It's given to all salaried people and pension receivers.

The standard deduction directly cuts your taxable income, which means you pay less tax. For example, if your total income is Rs. 8,00,000, after a standard deduction of Rs. 75,000, you only pay tax on Rs. 7,25,000.

This deduction is especially helpful for people with lower incomes, as it makes a bigger difference to their tax bill. It's a simple way the tax system helps reduce the tax burden on salaried people.

Difference between cost to company (CTC) and gross salary

Many people mix up CTC (Cost to Company) and gross salary, but they're not the same. Here are the key differences:

  • CTC includes all company spending on you - both direct and indirect This is the total cost the company bears for employing you.
  • Gross salary is the total before deductions but doesn't include employer contributions This is what appears at the top of your salary slip before any deductions.
  • CTC includes employer EPF contributions, gratuity provisions, and other benefits These amounts don't appear in your monthly salary slip.
  • Gross salary is always less than CTC but more than your take-home pay Your actual bank deposit will be the net amount after all deductions.
Understanding this difference helps you know your true compensation package. When comparing job offers, look at both the CTC and the expected take-home pay to make the best choice.

Looking to buy a home? Your gross salary is what lenders check when deciding your home loan eligibility. Find out if you qualify for a Bajaj Housing Finance Home Loan with interest rates starting from just 7.99%*  p.a. Check your eligibility by entering your mobile number and OTP. You might already be eligible for a loan up to Rs. 15 crore*.

How to apply for Bajaj Finserv Home Loan

Applying for a Bajaj Housing Finance Home Loan is a simple process that can be completed in just a few steps:

  • Click on the 'APPLY' button
  • Enter your full name, mobile number, and employment type
  • Select the type of home loan you want
  • Verify your phone number with OTP
  • Provide details like your monthly income and required loan amount
  • Enter your date of birth, PAN number and other requested information
  • Click 'SUBMIT' to complete your application
After submission, a Bajaj Finserv representative will contact you to guide you through the next steps. The approval process is quick, with decisions made within 48 hours* of application.

With Bajaj Finserv, you can get a home loan of up to Rs. 15 crore* based on your eligibility. EMIs start at just Rs. 722/lakh*, making it more affordable to buy your dream home.

Eligibility criteria to get home loan from Bajaj Finserv

To qualify for a Bajaj Housing Finance Home Loan, you need to meet these eligibility criteria:

  • Nationality: You must be an Indian citizen living in India
  • Age: Salaried applicants should be 23-67 years old; self-employed professionals 23-70 years old
  • CIBIL Score: A score of 725 or higher is ideal for home loan approval
  • Occupation: You should be a salaried employee, professional individual, or self-employed
The documents required for home loan application include KYC documents (identity and address proof), income proof (salary slips or P&L statement), business proof for self-employed applicants, and bank statements for the last 6 months.

Home loan interest rates at Bajaj Finserv start from 7.99%*  p.a. for salaried employees and 8.30%* p.a for self-employed professionals and 8.10%* p.a. for doctors. These competitive rates help make your dream home more affordable.

Want to know if you qualify? Check your eligibility now by entering your mobile number and OTP. You may already be eligible for a Bajaj Housing Finance Home Loan with favorable terms and quick processing.

Conclusion

A salary slip is more than just a piece of paper - it's a vital financial document that affects many parts of your life. From proving your income for loans to helping you file taxes correctly, salary slips play a key role in your financial world.

Understanding your salary slip helps you:

Know exactly what you earn and where it goes

Plan your budget and savings better

Claim the right tax benefits

Apply for loans and credit cards more easily

Keep track of your retirement savings

If you're planning to buy a home, your salary slip will be one of the most important documents you'll need. It proves your income and helps lenders decide how much they can offer you.

Bajaj Finserv offers home loans with interest rates starting from just 7.99%*  p.a., with loan amounts up to Rs. 15 crore* and repayment periods up to 32 years. Their quick approval process - within 48 hours* - means you can move forward with your home buying plans without delay.

You can also benefit from their top-up loan facility of up to Rs. 1 crore* for additional financial needs, with no foreclosure fees for individual borrowers on floating interest rate loans.

Ready to take the next step toward owning your dream home? Check your eligibility for a Bajaj Housing Finance Home Loan today by entering your mobile number and OTP. You may already qualify for a loan with favourable terms that suit your financial situation.

*Terms and conditions apply

Frequently asked questions

How can I get a salary slip?
Your employer issues salary slips monthly, usually via e-mail or on the company's internal portal. You can download and print them from there.

Should I save my salary slips and store them in a safe place?
Yes, definitely. Store them securely for at least 22 months. You'll need salary slips for tax returns, job changes, and loans. Check your eligibility for a home loan from Bajaj Finserv by entering your mobile number and OTP. You may already qualify for competitive terms.

Are handwritten salary slips legal?
Yes, handwritten salary slips have the same legal value as electronic ones. Both can be used as proof of income for loans and other purposes.

How can I make a simple salary slip?
You can create salary slips using Excel spreadsheets or payroll software. Add employee details, earnings, deductions, and bank information to calculate the net salary.

How do I download my payslip?
Log into your company's salary portal, find the "Salary Slips" option, select the month, and click download. You may need to enter a password to open the PDF file.

Do banks ask for salary slips?
Yes, banks typically request 2-3 months of salary slips when you apply for credit products like home loans. Want to check your home loan eligibility? Enter your mobile number and OTP to see if you qualify for a Bajaj Housing Finance Home Loan. Check your offers now.

How does a salary slip help to save my Income Tax?
Salary slips show allowances like HRA and LTA that offer tax benefits. They help you claim deductions correctly when filing your tax returns.

What is professional tax?
Professional tax is a state government levy on income earned by employees and professionals. The maximum annual amount is Rs. 2,500, deducted monthly from your salary.

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