Further, house rent allowance and employee provident fund are linked to the basic salary.Īlthough it’s good to have a high basic salary, it’s that component of your salary, your company itself will be a lot vigilant about.
Why it matters: If you have a very big amount of basic, your tax will be higher. This component is higher for junior level employees, and at senior level, it will be less. The basic salary amount is a very important part of your salary slip as the rest function depends on it. For example, we take the sample salary slip for 15000 then the basic salary amount of the employee will be around 6000 rupees. The Basic salary of the employee is around 35- 50% of the total salary. Let’s have a look at a common format of the salary slips in India. Your salary components like basic pay, dearness allowance, house rent allowance, city compensatory allowance, and other emoluments form the part of your gross salary. It does not include the contributions to the PF and gratuity, among other things. On the other hand, gross salary is the amount an employer has committed to pay an employee, monthly. Cost to Company involves salary, reimbursements, contributions and tax benefits. Cost to Company (CTC) vs in-hand / gross salaryĬost to Company refers to the total amount an employer will spend on an employee, in a given year, whereas, gross salary is the amount an employee receives as a salary, before any deductions. Further, the format of salary slip is different for different employers and for different countries. We understand that it is complicated to figure out the salary slip as an employee it contains a lot of information. Moreover, salary slip is important for applying loans, credit card, mortgage of houses and lands and for receiving the government benefits such as subsidy and medical benefits. The income tax amount which you need to pay totally depends on the salary slip and the income tax return amount, which you claim from the government. That’s why according to the law, it is your right to ask for the salary slip if your company is not issuing it. The employee salary slip is very important as it is the legal proof of the earning and the deductions. Why is Understanding Salary Slip Important? 8 What are the Benefits of Salary Slip?. 7 Use knowledge of salary slip to increase your take-home salary. 6 Download Salary Format In Excel, Word, PDF. 
2 Cost to Company (CTC) vs in-hand / gross salary.1 Why is Understanding Salary Slip Important?.
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