What a Salary Slip Must Do, and the Wage-Slip Requirement
A salary slip has three jobs. It tells the employee exactly what they were paid and why, so the monthly 'my salary is short' conversation is a lookup rather than an investigation. It is the employee's evidence for loans, visas, tax filing and future employment. And it is a statutory record: the Code on Wages requires employers to issue a wage slip to every employee, in the form prescribed by rules, and electronic issue is acceptable. Under the earlier Payment of Wages and Minimum Wages frameworks, state rules already prescribed wage slip forms; those continue until the Code's rules replace them.
A slip that fulfils all three jobs has a consistent structure: a header identifying employer, employee and period; an attendance block showing how many days were paid and why any were not; an earnings block with each component; a deductions block with each statutory and other deduction; net pay in figures and words; and, optionally, employer contributions and year-to-date totals. The salary slip glossary entry gives the short definition; the rest of this article walks the layout row by row.
Format does not mean design. Whether you produce it in Excel, Word or a payroll system's PDF, the fields and their traceability to attendance and statutory rules are what matter. The salary slip format in Excel template implements the layout described here; the salary sheet Excel template with formulas produces the register the slips are cut from.
- The Code on Wages requires a wage slip for every employee; electronic slips are acceptable
- Structure: header, attendance block, earnings, deductions, net pay, optional employer contributions and YTD
- Every line must trace to attendance, the salary structure or a statutory rule
- Excel, Word or PDF is a delivery choice; the fields are the compliance content
The Header: Identifying Employer, Employee and Period
Row one carries the employer's legal name, address and, ideally, registration identifiers: PF establishment code, ESIC employer code and PAN or TAN. These matter because the employee's PF passbook and ESIC records show the establishment code, and a slip that carries it lets the employee (and a lender or inspector) tie the slip to the statutory record without asking HR.
The employee block: full name, employee code, designation, department, branch or site (the work location that drives professional tax), date of joining, UAN, ESIC IP number, PAN and bank account (masked to the last four digits). Then the pay period: the month and year, and, where you pay for a period other than the calendar month, the exact from and to dates. Add the payment date and mode. If your organisation runs multiple pay cycles or pays weekly-rated workers, the period dates prevent the month-name ambiguity that makes slips useless in a dispute.
- Employer: legal name, address, PF establishment code, ESIC code, PAN/TAN
- Employee: name, code, designation, department, branch/site, DOJ, UAN, ESIC IP, PAN, masked bank account
- Period: month and year plus exact from–to dates; payment date and mode
The Attendance Block: Days Paid, LOP and the Divisor
This block is where most disputes are settled or created. Show: total days in the period (30 or 31, or 26 working days if you are on a 26-day basis for daily-rated staff), weekly offs, paid holidays, days present, paid leave days by type, LOP days, and the resulting days paid. Show half-days as 0.5 and late marks converted to LOP separately, so the employee can see that two late marks became one half-day under the policy rather than assuming an error.
Add overtime hours (weekday, weekly-off and holiday hours separately if rates differ) and, where relevant, the number of night shifts or other allowance triggers. State the divisor used for proration: 'Per-day wage = monthly wage ÷ 26' or '÷ 30' or '÷ calendar days'. The salary per day and LOP calculation guide explains the choice; the slip's job is to declare it so the arithmetic on the earnings lines can be checked.
For daily-rated and minimum-wage workers, this block is the wage register in miniature: days worked × daily rate should equal the basic-plus-DA line below. If the numbers on the slip cannot reproduce the earnings, the slip has failed as evidence.
- Total days, weekly offs, holidays, present, paid leave by type, LOP, days paid
- Half-days and late-mark conversions shown, not silently netted
- Overtime hours by type and other allowance triggers (night shifts) counted
- Declare the divisor so every prorated earning can be re-computed
Earnings Lines Explained
Show fixed and actual side by side: the monthly rate for each component and the amount actually earned after proration for LOP. Basic: the core wage, on which PF, gratuity and bonus are computed; under the Labour Codes basic plus DA must be at least 50% of total remuneration, so a slip with basic at 30% is itself evidence of an add-back requirement. Dearness allowance: cost-of-living component, common in minimum-wage and industrial structures, part of the PF base. House rent allowance: exempt within limits under the old regime only. Conveyance, special allowance and other fixed allowances: taxable, generally outside PF unless the 50% add-back applies.
Variable earnings come next: overtime wages with hours and rate visible (e.g. '48 hours × ₹173.08'), night shift or other shift allowances with the count, incentives or commissions with their period, statutory bonus if paid monthly, arrears with the period they relate to, and leave encashment when paid. Reimbursements against bills, if paid through payroll, sit in a separate non-taxable block or after net pay, because they are not earnings and must not inflate gross for ESI or income tax. Then gross earnings: the total of all taxable earnings for the month.
Each earning line must be traceable: fixed lines to the salary structure with its effective date, prorated lines to the days paid and divisor above, overtime to approved hours, arrears to a revision letter or notification. For how the components should be designed in the first place, read salary structure components in India.
- Fixed components with monthly rate and earned amount: basic, DA, HRA, conveyance, special allowance
- Variable: overtime (hours × rate), shift allowances (count), incentives, arrears (period), encashment
- Reimbursements shown separately and outside gross
- Gross earnings = sum of taxable earnings for the month
Deductions Lines Explained
Employee PF: 12% of basic plus DA (with the 50% add-back where applicable), on wages up to the ₹25,000 ceiling from 17 September 2026, unless you contribute on higher wages by agreement. Show the base alongside the amount. Employee ESI: 0.75% of gross wages for employees earning up to ₹21,000 (₹25,000 for persons with disability), continuing to the end of the contribution period after crossing the ceiling; nil for employees earning up to ₹176 a day. Professional tax: the state slab for the employee's work location, with the February or last-month uplift where the state applies it; the state-wise professional tax slabs article lists them.
TDS: the month's income tax deduction based on projected annual income under the declared regime. Labour welfare fund: the small state contribution in the months it falls due. Then non-statutory deductions, each with a reference: salary advance recovery (with the balance outstanding), loan EMI, canteen or transport charges, fines and damage-or-loss deductions (which are legally limited and require notice), and any voluntary deductions such as VPF. Total deductions closes the block.
Two disclosures strengthen the slip. First, show the deduction base for PF and ESI, so an employee can verify 12% and 0.75% themselves. Second, show the employer's contributions, PF 12% (with the EPS 8.33% and EPF 3.67% split), EDLI 0.5%, admin 0.5% and ESI 3.25%, in a separate block that is clearly not deducted from the employee. It answers the perennial 'why is my CTC ₹25,000 but my slip says ₹22,000' question without a meeting.
- Statutory: PF (12% of basic + DA, ₹25,000 ceiling), ESI (0.75% of gross to ₹21,000), PT (state slab), TDS, LWF
- Non-statutory with references: advances, loans, canteen, fines within limits, VPF
- Show the base for PF and ESI so percentages can be verified
- Employer contributions in a separate, clearly non-deducted block
Net Pay, Year-to-Date and a Sample Layout Row by Row
Net pay = gross earnings − total deductions, shown in figures and in words, with the bank account (masked) and payment date. Year-to-date columns for gross, PF, PT and TDS help employees at tax time and reduce Form 16 queries. A short notes area can carry the LOP reason summary, the arrears explanation or the message that a revision takes effect next month.
A sample layout, top to bottom: (1) employer name, address, PF and ESIC codes; (2) 'Salary slip for September 2026, period 01–30 Sep 2026, paid on 05 Oct 2026 by NEFT'; (3) employee identity block with UAN, ESIC IP, PAN, branch; (4) attendance block: total days 30, weekly offs 4, holidays 0, present 23, paid leave 1, LOP 2, days paid 28, OT hours 12, divisor 30; (5) earnings with rate and earned columns: basic 15,000 → 14,000; HRA 6,000 → 5,600; special allowance 4,000 → 3,733; overtime 12 h × ₹144.23 = 1,731; gross 25,064; (6) deductions: PF 12% of 14,000 = 1,680; ESI: nil (gross above ₹21,000 at the start of the contribution period, so not covered); PT per state; TDS nil; advance recovery 1,000; total deductions 2,680 plus PT; (7) net pay ≈ 22,384 less PT, in words; (8) employer contributions block; (9) YTD columns; (10) notes and 'system-generated, no signature required' or an authorised signature.
The overtime rate in that example is (15,000 + 0 DA) ÷ 26 ÷ 8 = ₹72.12 ordinary, doubled to ₹144.23, computed on basic plus DA. Whether the ordinary rate for overtime should include other components depends on the wage definition in your state rules and settlement; state your basis on the slip or in the policy so the line is reproducible.
- Net pay in figures and words, masked bank account, payment date
- YTD gross, PF, PT and TDS columns reduce Form 16 season queries
- Ten-row layout from employer header to notes; every number reproducible from the attendance block
- State the overtime rate basis so the OT line can be checked
Digital vs Printed Slips, and Mistakes That Undermine Them
Electronic slips through an employee self-service app are now the norm and are accepted as wage slips under the Code on Wages rules. They remove printing and distribution effort, provide a permanent archive the employee can access after leaving, and can be password-protected. Printed slips still make sense for workers without smartphones or for sites where the client requires a paper record; if you print, keep an acknowledgement register. Either way, the slip must be issued for every pay period, to every employee, on or before the pay date.
The mistakes that recur: showing CTC items such as employer PF or gratuity provision as earnings, which inflates gross and confuses ESI and tax; omitting LOP days so the employee cannot see why basic is short; hiding overtime inside 'other earnings' with no hours; deducting professional tax at the head-office state's slab for a branch employee; showing the old ₹15,000 PF ceiling after 17 September 2026; and issuing slips whose totals do not match the salary register or the bank credit. Each is fixed by producing the slip from the same dataset as the register and the bank file.
Attend Mitra generates payslip PDFs, singly or as a monthly ZIP, from the same attendance-linked payroll run that produces the salary register and the NEFT file, with days paid, LOP, overtime hours, each earning and deduction, and employer contributions shown, and publishes them to the employee self-service app. For more on distribution practices and employee queries, see the payslips guide.
- Electronic slips via self-service are accepted; print only where needed and keep acknowledgements
- Never show employer CTC items as earnings; never hide LOP or overtime hours
- Apply PT by work location and the current ₹25,000 PF ceiling
- Generate slips, register and bank file from one dataset so totals always agree