Contents of a Pay Slip - Defining Salary Structure:
The Code on Wages Bill, 2019 which is
recently passed by both houses of parliament defines the term wages as
follows:-
“All remuneration, whether by way of
salary, allowances or otherwise, expressed in terms of money or capable of
being so expressed which would, if the terms of employment, express or implied,
were fulfilled, be payable to a person employed in respect of his employment or
of work done in such employment, and includes,—
(i) Any remuneration payable under any
award or settlement between the parties or order of a court;
(ii) Any remuneration to which the person
employed is entitled in respect of overtime work or holidays or any period of
leave;
(iii) Any additional remuneration payable
under the terms of employment, whether called a bonus or by any other name;
(iv) Any sum which by reason of the
termination of employment of the person employed is payable under any law,
contract or instrument which provides for the payment of such sum, whether with
or without deductions, but does not provide for the time within which the
payment is to be made;
(v) Any sum to which the person employed is
entitled under any scheme framed under any law for the time being in force;
(vi) Any house rent allowance,
But does not include––
(A) any bonus payable under this Code,
which does not form part of the remuneration payable under the terms of
employment or which is not payable under any award or settlement between the
parties or order of a court or Tribunal;
(B) the value of any house-accommodation,
or of the supply of light, water, medical attendance or other amenity or of any
service excluded from the computation of wages by a general or special order of
the appropriate Government;
(C) any contribution paid by the employer
to any pension or provident fund, and the interest which may have accrued
thereon;
(D) any travelling allowance or the value
of any travelling concession;
(E) any sum paid to the employed person to
defray special expenses entailed on him by the nature of his employment; or
(F) any gratuity payable on the termination
of employment in cases other than those specified in sub-clause (iv):
ELEMENTS
OF SALARY:
Normally a salary structure consists of the
following elements:
1.
Basic Wages
2.
Dearness Allowance
3.
Overtime wages
4.
House Rent Allowance
5.
Leave Travel Allowance
6.
Conveyance Allowance
7.
Medical Allowance
8.
Incentives
9.
Perquisites
10.
Reimbursement
11.
Contribution to Employee’s
Provident Fund
12.
Contribution to Employee’s
State Insurance
13.
Other Deductions
14.
Professional Tax
15.
Attendance
16.
Income Tax (Tax Deducted at
Source)
17.
Gross Salary
18.
Net Salary
19.
Take Home Salary
20.
Cost To Company
Benefits
of a Salary Slip:
1.
It is an Evidence of
Employment.
2.
It is an Evidence of
Earning for the purpose of borrowing
3.
It is an Evidence of Past
Work Experience.
4.
It is an Evidence of Last
Drawn Wages.
5.
It is an Evidence of
Contribution to Employee Welfare Funds such as ESIC or EPF.
6.
It is an Evidence of
Pending Wages.
7.
It is Evidence of Tax
Deducted.
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