A salary slip should show who was paid and for which month, the paid days and loss-of-pay days, every earning (basic, HRA, allowances, overtime, incentives), every deduction (PF, ESI, professional tax, TDS, advance recovery) and the net pay. Net pay is gross earnings minus total deductions. Employer contributions to PF and ESI are not deducted from the employee, and should be shown in a separate section so the employee can see the full cost.
Details at the top of the payslip
- Employer name and address
- Employee name, employee code, designation and department
- Date of joining
- Pay month, and the pay period if it is not the calendar month
- UAN or PF number and ESI number, where they apply
- PAN, and bank account number in masked form
- Days in the month, paid days and LOP days
Component table
| Section | Component | What it is |
|---|---|---|
| Earnings | Basic (and DA, if paid) | The fixed core of salary. PF is calculated on it. |
| Earnings | House rent allowance (HRA) | Allowance towards rent. |
| Earnings | Special or other allowances | The balance of fixed monthly pay, and any conveyance or similar allowance. |
| Earnings | Overtime, incentives, bonus | Variable pay for the month. |
| Earnings | Reimbursements | Expenses repaid against bills. Often shown separately from salary. |
| Deductions | Provident Fund (employee) | 12% of PF wages. See PF rules. |
| Deductions | ESI (employee) | 0.75% of wages for employees within the ₹21,000 limit. See ESI rules. |
| Deductions | Professional tax | As per the state slab, where the state levies it. See professional tax by state. |
| Deductions | TDS (income tax) | Tax deducted on salary, spread over the year. |
| Deductions | Advance or loan recovery | Instalment of a salary advance taken earlier. |
| Employer contributions | PF (employer) and ESI (employer) | Paid by the employer on top of gross salary. Not deducted from the employee. |
| Summary | Gross earnings, total deductions, net pay | Net pay = gross earnings − total deductions. |
Worked example
An employee has Basic ₹12,000, HRA ₹4,800 and special allowance ₹3,200, with no LOP days, in a state that does not levy professional tax.
| Item | Amount |
|---|---|
| Gross earnings (12,000 + 4,800 + 3,200) | ₹20,000 |
| PF, employee: 12% of ₹12,000 | ₹1,440 |
| ESI, employee: 0.75% of ₹20,000 | ₹150 |
| Total deductions | ₹1,590 |
| Net pay | ₹18,410 |
| Employer PF: 12% of ₹12,000 (shown separately) | ₹1,440 |
| Employer ESI: 3.25% of ₹20,000 (shown separately) | ₹650 |
If the month had LOP days, each earning would first be reduced in proportion. See how per-day salary and LOP are calculated.
Why a proper payslip matters
- Labour laws require employers to give wage slips to workers. The prescribed form and whether it can be electronic depend on the law and state rules that apply to your establishment.
- Employees need payslips for bank loans, credit cards, rental agreements and visa applications.
- A clear breakdown answers "why was my salary cut?" before it is asked, because LOP days, advance recovery and statutory deductions are all visible.
- Payslips, the payroll register and the PF and ESI returns should agree with each other. Inspectors and auditors compare them.
Common mistakes
- Showing only a single "salary" figure with no split into components.
- Leaving out paid days and LOP days, so the employee cannot check the calculation.
- Adding employer PF and ESI to the deductions column. They are the employer's cost.
- Deducting professional tax in a state that does not levy it, or using an old slab.
- Recovering an advance without showing the balance still outstanding.
Payslips in FundRaksha HR
FundRaksha HR calculates salary from attendance and leave and produces a payslip PDF for every employee on all plans. Employees can see the breakdown in the app: per-day rate, paid days, LOP, Basic, HRA, PF, ESI and professional tax. Statutory deductions (PF, ESI, professional tax and TDS) and advances recovered in instalments are part of the Pro and Enterprise plans. See pricing.
Frequently asked questions
What are the main components of a salary slip?
Earnings (basic, HRA, allowances, variable pay), deductions (PF, ESI, professional tax, TDS, advance recovery), employer contributions and net pay, along with employee details, the pay month, paid days and LOP days.
How is net pay calculated?
Net pay is gross earnings minus total deductions. Employer contributions to PF and ESI are not part of the deductions.
Should employer PF be shown on the payslip?
It is good practice to show employer PF and ESI in a separate section. They are part of the cost to the company but are not deducted from the employee's salary.
Is a digital payslip acceptable?
Most employers issue payslips as PDFs, and employees use them widely for loans and other purposes. Whether an electronic wage slip meets the specific labour-law requirement for your establishment depends on the applicable rules, so confirm with your consultant.
Does the payslip need a signature or stamp?
A computer-generated payslip is commonly accepted without a signature. Some banks or authorities may ask for a signed or stamped copy, which the employer can provide on request.
This guide is general information for Indian employers, not legal or tax advice. Rates and rules change; confirm the current position with EPFO, ESIC, your state department or your consultant before acting.
Related guides
Attendance and payroll software in your city: Ahmedabad, Surat, Rajkot, Vadodara, Mumbai, Pune, Delhi, Noida, Gurugram, Faridabad, Ludhiana, Jaipur, Indore, Hyderabad, Bengaluru, Chennai, Coimbatore, Kolkata, Lucknow, Kochi