Instant Salary Slip Generator

What is a Salary Slip?

A salary slip, also known as a payslip or pay stub, is an official document provided by employers to employees that details their earnings and deductions for a specific pay period. It provides transparency about how an employee's net pay is calculated.

In India, the Wage Code 2019 mandates that all employers must provide a salary slip to their employees, making it a legal requirement for businesses of all sizes.

A salary slip/payslip is more than just a routine document, it provides a transparent summary of an employee’s earnings and deductions and serves as official proof of income, employment, and tax compliance. And a few other components are also included.

In the next section let's discuss the main components in detail.

Components of a Salary Slip

Payslip or Salary Slip consists of 2 major components, which are further divided into sub-components. So, let's look into the following:

Earnings Components

1. Basic salary:The fundamental component of an employee's compensation, typically 40-50% of the Cost to Company (CTC). Basic salary forms the base for calculating various allowances and deductions.

2. House Rent Allowance (HRA): An allowance provided to employees to meet rental expenses. HRA is typically 40-50% of the basic salary for employees in metropolitan cities and 30-40% in non-metropolitan areas.

3.Dearness Allowance (DA): An inflation-linked component paid to employees to offset the impact of rising living costs. Common in government and public sector organizations.

4. Special Allowance:A flexible component that employers can use to structure the CTC after accounting for basic salary and other standard allowances.

5. Performance Bonus:Variable pay linked to individual, team, or organizational performance metrics. May be paid monthly, quarterly, or annually.

6. Other Allowances:Additional components like conveyance allowance, medical allowance, education allowance, etc., which may have specific tax implications.

Deduction Components

1. Employees' Provident Fund (EPF): A mandatory retirement savings scheme where both employer and employee contribute (typically 12% of basic salary from each).

2. Professional Tax: A state-imposed tax on professions, trades, and employment. The amount varies by state and salary slab.

3. Income Tax (TDS): Tax Deducted at Source as per the employee's income tax slab and declarations under various sections of the Income Tax Act.

4. Health Insurance Premium: Deductions for employer-provided health insurance coverage or group medical insurance.

5. Loan Repayments: Installments for any loans or advances taken by the employee from the organization.

6. Other Deductions: May include welfare fund contributions, canteen charges, union fees, voluntary deductions, etc.

How to Calculate Salary Hike?

Are you doing the entire math yourself? Well, here’s the simple way to do all the calculations:

1. Start with your current salary: Note your base salary before any taxes or deductions (say Rs. 50,000).

2. Enter the hike percentage: Include the hike percentage you received (say 30%).

3. Calculate the salary increase: Apply this formula: Increase amount = (Hike percentage/100) * Current salary

4. Find your new salary: Add the increase amount to your current salary: New Salary = Current Salary + Increased Amount

If that feels too much of an effort, you don’t need to do the math yourself! Simply enter the details into our Salary Hike Calculator and get precise results in milliseconds.

Significance of a Salary Slip

For Employees

• Provides transparency about how net salary is calculated

• Serves as proof of income for loan applications and visa processes

• Helps in verifying tax deductions and filing income tax returns

• Assists in financial planning and budgeting

For Employers

• Ensures compliance with labor laws and regulations

• Minimizes disputes and misunderstandings regarding salary calculations

• Improves employee trust and satisfaction through transparency

• Maintains organized payroll records for accounting and auditing purposes

For Compliance

• Meeting legal requirements under the Wage Code 2019

• Facilitating accurate tax reporting and remittance

• Supporting documentation for statutory audits

• Providing evidence of fair compensation practices

How to Generate a Pay Slip Using Our Tool

With our tool, you can generate salary slips quickly and easily.

1. Enter Company Details: Add your company name, logo, and address. Input the pay period and payment date.

2. Add Employee Information: Enter employee name, ID, and designation. Specify the number of paid days and loss of pay days.

3. Input Earnings & Deduction: Add all earnings components (Basic, HRA, DA, etc.) Enter all applicable deductions (PF, TDS, etc.).

4. Generate & Download: Preview the salary slip to ensure accuracy. Download as PDF or Excel, or email directly to employees.

Why Use Keka's Salary Slip Generator?

Keka saves you hours of manual labor by automatically calculating totals and converting amounts to words.

You can choose from various templates to give your paystubs a neat and orderly appearance.

Feel secure knowing that all our salary slip formats adhere to Indian labor laws and regulations.

You can alter the salary slip to meet your business's unique requirements by adding or deleting elements as needed.

Sensitive payroll data is completely secure and private because it never leaves your browser.