A salary slip is a document issued by an employer to an employee. It contains a detailed description of the employee's salary components like HRA, LTA, Bonus paid etc and deductions for a specified time period, usually a month. It may be issued on paper or mailed to the employee. Employers are legally bound to issue salary slips to their employees periodically, as a proof of salary payments to employees and deductions made.
Basis for Income Tax payment: The salary slip forms the basis for income tax calculation. It helps to prepare the income tax returns and determine how much tax is to be paid or how much refund is to be claimed by the employee for the year.
Provides access to various facilities: The salary slip gives employees access to various free or subsidised facilities provided by the government such as medical care, subsidised food grains, etc.
Helps borrow: Salary slips provide lenders assurance that their lendings will be repaid. It is an important document to avail loans, credit, mortgage and other borrowings.
Helps assess offers: Employees can compare offers from new employers based on their previous salary slips. It also helps them negotiate salary with new employers or for new roles.
Proof of employment: Salary slips are an important legal evidence of employment. Often, while applying for travel visas or to universities, applicants are asked to furnish a copy of their salary slip as proof of employment and designation.