Pagar Khata -Staff Payroll & Attendance Management
It is important for an employee to know and understand what a salary slip is. If an employee does not understand what a salary slip is, they would have a lot of difficulties filling out paperwork when applying for work and for other needs.
Now let's get to know more in-depth facts about the topic in upcoming sub-sections.
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BASIC SALARY- Basic salary, also called base salary, is the regular income of employees before or after any addition or deduction from their income. The basic salary is the amount paid to an employee before any extras are added or subtracted. Allowances will be added to the basic wage, such as the internet allowance for work from home employees or telephone allowance for phone calls.
DEARNESS ALLOWANCE - Dearness allowance is another part of the salary paid to employees. It is paid for reducing the impact of inflation. The laws that control the DA differ depending on where you live. The DA is a completely taxable benefit. There are two types:
1) DA is paid in accordance with the terms of employment.
2) DA not paid in accordance with the terms of employment.
HOUSE RENT ALLOWANCE - A house rent allowance is a portion of an employee's salary that is paid to cover the cost of renting a home. It helps workers for the amount they pay towards their rents.
This exemption is available to salaried people who live in rented houses and can use it to limit their tax liability. However, this deduction is entirely taxable if you do not live in a rented house.
TRAVEL ALLOWANCE- Conveyance allowance, also known as a transportation allowance, is a form of stipend provided to workers by their employers to cover travel expenses between their home and workplace. Note: In the 2020 Union Budget, a standard deduction of Rs. 50,000 was introduced. Employees are usually granted benefits on top of their basic wages, which may or may not be taxable under the Income Tax Act.
LEAVE TRAVEL CONCESSION ( LTC ) -Tax exemption is available for leave travel allowance. Employers give it to their workers in order to cover their travel costs while they are on vacation. Section 10(5) of the Income Tax Act of 1961 exempts the amount paid as leave travel allowance from taxation. Only domestic travel is protected by the leave travel allowance, and the travel must be by air, rail, or public transportation.
MEDICAL ALLOWANCE - A medical allowance is a set amount paid to employees of a company to cover their medical expenses.
BONUS ALLOWANCE -The employer pays bonus to an employee in recognition of his work. It is important to inspire and motivate employees as much as possible. As a result, some amount is paid as bonus to the workers, which is fully taxable.
OTHER ALLOWANCE- Other allowances may also be available to you, depending on the situation or job. Some have a limit, while others are not fully taxable.
STANDARD DEDUCTION- A standard deduction is a single larger deduction you can claim, instead of multiple smaller deductions. It was first discussed in Budget 2018 as a substitute for the fuel allowance exemption and reimbursement of miscellaneous medical expenses. The standard deduction is Rs 50,000 for the financial years 2019-20 and 2020-21.
Under the deductions section of the payslip, you'll notice the following main items:
EMPLOYMENT PROVIDENT FUND - Aside from allowances, there are several elements that are included in your salary slip. They include amounts that are deducted from your pay, such as contribution to provident funds. It is an amount of money deducted from your salary , usually 12 per cent of your basic salary, which you receive after retirement. The Employees Provident Funds and Miscellaneous Act, 1952, governs the scheme. Both the employee and the employer contribute 12% of the employee's base wage and dearness payment to the EPF. The current interest rate on EPF deposits is 8.50 per cent per annum.
PROFESSIONAL TAXES - Professional tax is a nominal deduction imposed by state governments on all workers who earn more than a certain amount of money. It refers to anyone who makes a living through any medium, not just salaried professionals. Although the standard sum is Rs 250, this is not always the case. The amount of professional tax deducted from you is determined by the state governments and thus varies by state.
TDS - TDS is deducted for those employees whose salary is more than the taxable limit. The employer deducts the TDS from the salary of the employee and deposits it with the government.
In simple terms, a payslip or salary slip to an employee is the amount of money paid by the employer to you for the month.It contains all of the details mentioning how the salary was calculated and sent to you. We hope you've understood everything about salary slips.
FREQUENTLY ASKED QUESTIONS-
What are allowances?
An allowance is a financial benefit granted by the employer to an employee. Some of these allowances are for expenses borne by an employee on official duty. How do I get a salary slip? You can usually get in one of the two ways below:
What should you do if you lose the salary slip?
If you lose the salary, you request from the Finance or HR department. You can also request a salary slip from your previous employer when you apply for a new job. A salary certificate provided by the employer is also considered instead of salary slip.
Who can receive a salary slip?
Every employee can get a salary slip. In fact, every employee has the legal right to request a salary slip from their employer. It may be a hard copy or a soft copy.
What is the exemption us/10 in salary slip?
Under section 10 of the Income Tax Act, allowances include house rental, leave travel allowances, research and scholarship allowances are included.
Pagar Khata -Staff Payroll & Attendance Management