Understanding the Significance of Pay Slips in Employee Compensation

Hi,

I work in a small IT company. For the months of February and March 2008, we have not received any payslip. But we signed the register for accepting the salary. We used to receive hardcopy payslips before.

I need to know how important a payslip is with respect to the future and career. We have again received a payslip for the month of April. The employer has said that since they would provide the Income Tax Form 16 to us, the payslip is not necessary for the skipped months.

Please, can someone tell me if this is okay, or should I demand the missed payslips? Any help in understanding what a payslip is and why it is necessary would be heartily appreciated.

Thanks in advance.

Hello Sudipto,

A payslip is something that you will always require. If in the future you change your job, the new company might ask you for the salary slip. Then, you will be in a problem as they have deducted tax. So, this slip is much more important as it shows how much amount is being deducted. Please convince your HR or employer to provide you with the salary slip for your future.

Hi Sohini,

Thanks for your reply. I wish to know whether "the new company might ask you for the salary slip" for all the months that I have worked in the old company... say 18 months? Or just some slips. What if I show them IT-FORM 16. Won't that do? Our employer is not ready to give it.

Normally, they don't ask for all the salary slips, but if by chance they ask, you will be in a false position. So, isn't it better to be on the safe side? You should always be prepared with all company documents for the future.

Dear Sudipto,

Though the salary slips are an important aspect when it comes to future employment, the usual references of salary slips are taken only for the past 3 months. Some companies ask for a bank statement of salary accounts to check credibility. Even in the case of bank transactions, the latest 3 salary slips are requested along with 6 months records like bank statement of the account.

Regarding your fear of being placed in a false position, wouldn't your employer provide you with the requisite relieving documents when you decide to move to another employer? Also, if you are too skeptical and your current employers are not providing the stated salary slips, ask for a salary proof letter from your employers! There's always a way out...and you are not even in any kind of trouble!!

Cheer up :)

Regards,
Kamaljit

Hi Kamalzz,

Thanks for your message. I would like to know if the Income Tax Form 16 provided by my employer serves the same purpose as a salary slip or a "salary proof letter." Could you please clarify this for me?

Thanks again.

Hi Sudipto,

Why don't you suggest a better option to your employer, like electronic transfer from your company to your account? This would serve as sufficient proof of your income and is as valid as a salary letter. You can also ask them to issue a salary certificate. In case they create any troubles regarding this, you can do so under the pretext of obtaining a bank loan. It's advisable to do this every six months or whenever you receive an increment.

The above suggestions should help resolve your problem. Nowadays, most companies do not request a salary slip; instead, they ask for a salary certificate or even accept a bank statement if there is an electronic transfer from your previous company. This practice is widely accepted by all financial organizations.

Regards,
AJ

Hi Sudipto,

Regarding your query about Form 16, it would serve the purpose as salary proof, but you would need to know the breakup, which would probably be mentioned in your joining letter - the breakup of CTC. Anyways, all government departments accept the Form 16 document.

Regards,
AJ

Hi,

A payslip is important for your career because your salary increment will be provided on this payslip, and your IT will be taken care of by this document. However, a payslip can be in the format of a hard copy or soft copy, and it won't matter.

Thanks,
R. Vigneshkumar

Hi Sudipto,

Enough has been put up. It all depends on what your requirement is. Any new employer may ask for your last S-Slip for them to understand the break-up of your CTC (PF, HR, etc.). However, in F-16, it shows a consolidated view. :confused:

If you are applying for any loan, etc., you will have to provide the last three months' S-Slips or certificates. So, in a nutshell, keep the first S-Slip (it should match the CTC of your appointment letter) and the last three months (which reflect your current CTC)!

If you have a good knack for HR, then get a certificate.

:xKamal

You have the right to ask for the payslip as it is the proof of what earnings and deductions are made to your salary. It is a statutory compliance as well.

Regards,
Dhananjay

Dear Sirs,

You can't prove the current organization you are working for. This is the first point. Second, providing payslips is a statutory requirement in the industry.

For HR: If an inspector visits your factory and asks, you should be able to provide payslips to employees to verify their employment.

Electronic transfers are beneficial for transactions between the company and employees.

If the company provides Form 16, there is no need for a salary certificate.

Thank you.
Manoj

Hi Ptelang,

Please note the salary break-up. If you give a Gross salary of Rs. 20,000/- to the hiring employee, you can structure it as follows:

- 50% in basic of the gross salary
- 40% of basic in HRA
- Medical reimbursement of Rs. 1250/-
- 10% of basic in LTA
- The rest can be designated as Transport allowance or Special Allowances.

If you have any queries, please revert.

Thanks,
Manoj

Suppose you give the salary to the employee.

Dear Sudipto,

In my sixteen years of working life, I have attended a couple of interviews. During my second round of interviews, some of them asked me for salary slips. At that time, we were not given salary slips by our company. So, I told them the truth. I even mentioned I could obtain a salary certificate from my employer. They accepted the reason because, in India, earlier, very few companies (mostly Ltd. Cos. not private ltd. co's) used to issue salary slips to their employees. Everyone is aware of this fact. Today, the scenario has changed with the advent of MNCs, and every employee is being issued a salary slip. However, a few unlucky ones still do not get this benefit. I suggest you talk to your future employer and provide a salary certificate from your current employer along with Form 16, appointment letter, increment letter (if any), and bank statements. This is essential for integrity.

Regarding your query about whether Form 16 alone is valid as proof of salary, in my opinion, the answer is NO. Form 16 can be fabricated or concocted by any individual since nobody cross-checks the same. That is why even when you apply for a bank loan, they request Form 16 along with 6 months' bank statements and payslips. I hope this clarifies your question. 😊

Kind regards, [Your Name]

Hi Fellas,

A Payslip is a document indicating the amount of salary earned by you during the month. This means the employee gets to know his pay breakup and his deductions for the said month. Also, unless it is signed and properly stamped and given to the employee, it has no legal validity.

Best Regards,

M. F. Velati

Hi,

Salary slip is a statutory requirement as per the government's minimum wages notification, and one copy of the payroll of every month is also a statutory requirement. The last requirement is the breakup, etc. I don't know why some employers do not give the payslip to employees. One question in my mind is whether the employer is not paying the wages as per the Minimum Wages Act.

Thanks,
Manoj

Dear Sudip,

I have read all your postings. A payslip is necessary at any point in time. Form 16, of course, gives you the total salary received for that year. It does not show you the first salary drawn and the latest revised salary. Only the payslip shows that. Otherwise, you have to carry your latest salary revision letter with you for the interview.

If your employer is not following the issue of a computer-generated payslip, it doesn't matter. You must be following the Shop & Establishment Act wage book and the wage slip book. It is better to enter the slip manually and have you sign it with a seal. This is a valid payslip as prescribed by the State Act. I also understand that many employers have not realized the need for payslip issuance. After all, the staff members look at us with trust and expectation.

Carry on, Sudip, all the best! We have to fight it out with employers even though we are expected to support them in everything.

Chandru HR Manager - Chennai

Hi,

A payslip is not a question of honesty or trust between employers and employees.

A payslip cannot replace Form 16. A payslip is a requirement as per the Minimum Wages Act, and Form 16 is necessary for Income Tax purposes. You cannot prepare an income tax return without Form 16, but you can do so without a payslip.

If a labor inspector requests it, a legal notice can be issued to the factory manager/occupier to present signed payslips for the last six months. This falls under the authority of the labor inspector.

Payslips and payroll are strictly statutory requirements as per the Minimum Wages Act. This is a fact.

Thanks & regards,
Manoj Kumar

I absolutely agree with Sujata... See Sudipto, please be on the safe side. Why call trouble when you can avoid it? Isn't it...

Yes, it is necessary because only through it can you know the breakdown of your salary, including deductions and earnings.

Sumit

Sudipto,

Form 16 will do the needful when you make a change. Nevertheless, the last two salary slips are also required. Not all salary slips are needed in the new job. Also, as mentioned by someone in the forum, there would be an experience letter given by the employer providing details of your employment with the organization. So, do not worry on those accounts.

Cordially,
preet

HR personnel are humans at the end of the day. Salary slips only confirm that fact when you spot the mistakes in reference to your salary credits.

Ha ha ha... :lol:

Dear All,

I faced a similar question at a company where I cleared all the technical rounds but got stumped by HR when I was unable to produce a salary slip. The first issue is that my current company does not issue a salary slip (the company simply refuses to do it, let alone negotiate with HR or anyone else; that's the bottom line). I provided a salary slip, but even that was deemed unacceptable.

Secondly, the individual from the new company insisted that it is mandatory for a registered company to provide a salary slip. I have verified this with a legal professional, and there is no such rule under Indian law. However, the HR (pardon my bluntness) continued to assert, "No, there are certain requirements for a registered company."

So, what should be done in this situation? :confused: :confused: :confused: :confused:

You might want to escalate the matter from the executive level to a higher one in your current place of employment and request them to provide the same for a simple reason that you need it for future reference or for filing purposes.

You may also want to provide your bank account statement, which would reflect your salary credits, and that should be acceptable by the new company. If they do not, I would say, continue your job hunting. :) After all, you can only take the horse to the pond...

Hi,

In terms of compliance, it is necessary to disburse the payslip and keep proof of the same if the employee(s) fall under the category of workman. However, in the case of others, it is not necessary to do the same. It is just a breakup information (deduction) for other uses by the employees if it is computer-generated. It can't serve the other purposes and a salary certificate is needed. Form 16 will not serve as proof of salary because it only covers the salary part and does not include cash payments made by voucher.

A salary certificate will fulfill all requirements.

Regards,
Arun

Hi dear Sohini,

I am working as an outsourced employee in an MNC for the last 7 months. I am receiving my salary in cash, with no payslip provided, and I have not been asked to sign up anywhere.

Is a payslip important in my case? I have no idea. I only have received an appointment letter from a consultancy stating that I am working for "name of my company," along with the date of joining (DOJ), and the monthly gross salary amount. That's all the documentation I have.

What should I do? I don't know the legal procedures. When I asked for the payslip, they mentioned that they cannot provide it but can only give the pay structure.

Please help.

Hi,

A salary slip is important, but you can also explore alternative options for showing your salary. This can include using an account statement, which can serve a similar purpose. You may want to consider requesting the salary slip from the HR department.

Thank you.

Hi,

A salary slip is important, definitely. But for future employment purposes, companies normally ask for payslips from the last month or a maximum of the last three months. So, if you have not received a slip for the last two months, it's not a major issue as you have already received it for this month.

Hi All,

It seems most of the people have no idea why the new company requires payslips. Please note the following:

a) Most of the time, candidates tend to give an incorrect amount as their previous salary, hence to verify the same.

b) Sometimes the new company feels that the candidate is overpaid, hence to verify the same.

c) The salary slips are requested to verify if the candidate has been working for the company or had been subcontracted. Generally, when verification happens, the ex-firm confirms that the candidate is working there, but they don't divulge information if he is a permanent employee or a subcontractor.

Hope the above is clear.

Regards,
AJ

Hi Sudipto,

All the Tier 1 IT companies ask for either a bank statement, your salary slips, and Form 16. However, in some companies, they do not consider candidates who receive their salary in hand. Therefore, try to have your salary deposited into your account rather than receiving it in cash (this seems to be how you are currently receiving your salary based on what you have written).

The reason behind this practice is to ensure that the individuals they hire are genuine and actually receive the salary they claim.

Thank you.

Hi,

The salary slip is not a minor issue; this is a significant concern. If you have not received the payslip from the employer, there are several questions to consider:

1. If your company pays you Rs. 30,000/- in cash per month, how can you demonstrate this in the account statement and provide proof of income to the income tax department?
2. If your company electronically transfers money to your account, how can you prove that this amount is your salary?
3. Some companies pay employees Rs. 1 Lakh per month, with Rs. 20,000/- by cheque and Rs. 80,000/- in cash without issuing a payslip. How can you prove your income and expenses for the full Rs. 1 Lakh?
4. Pay slips and payroll are essential for both the company and the employee in terms of labor regulations and statutory compliance.
5. If you have received Form 16 from your employer, you can declare your income using it for tax purposes. However, this may not necessarily reflect your actual salary when providing information to a new employer.

Manoj

Many Indian organizations don't provide payslips. Although there is no harm if it is not provided to you and there is no point in asking for the missed months, the important thing is it casts a bad impression of the organization. No professional would like to join such an organization. This feedback must go to the management or the employer.

Salil Sharma
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Salary slip is only important for the sake of your own satisfaction when you need to confirm that all the payments and deductions have been made in accordance with the terms and conditions of your employment and local applicable laws.

If you want to change the job, your new employer would only require your last month's salary slip or any proof which confirms your total monthly emoluments.

Hi gipsy,

Since you have been working as an outsourced employee, the company you are working for right now can't issue a payslip. It has to be issued by your parent company. In case your parent company refuses to provide a letter, then you will have to ask them to issue a salary certificate. This certificate should include a breakdown of your salary on their letterhead, which will serve as sufficient proof of your income. You can inform them that this documentation is needed for banking purposes.

A salary letter is mandatory for any company, but some companies in India do not issue them, especially for outsourced workers. If your parent company denies issuing the necessary documentation, please let me know.

Regards,
AJ

Dear AJ,

Thank you for your sincere response. I am not very clear on what you said. Can you please clarify a little?

"In case your parent company refuses to furnish a letter"... What letter did you mean? I had received the appointment letter from the consultancy with only the gross salary amount mentioned in it. Should I ask them for the salary breakup structure on the parent company's letterhead? Will that serve the purpose of a salary certificate? And why should I need to say something like "for banking purposes"? Isn't it my right to ask for the salary structure?

I am a fresher and really unaware of all these. I honestly appreciate your help, but I am not clear on what you said, so I hope you won't mind clarifying it a little further. I will only be grateful to you.

Regards,
Gipsy

Hello Gipsy,

Agreed that a salary slip/certificate is your right, but mentioning what AJ said for banking purposes would generate a sense of urgency rather than when you say, maybe "for my knowledge"...

Hi Gipsy,

Please note the following:

Parent Company: This is the company that you have been hired by. The company that has outsourced you.

Client Company: This is the firm where you are outsourced, or the company where you are currently working.

By letter, I meant the salary certificate. Since the company that has hired you denies giving you a salary slip every month, I guess they would have problems giving you a salary certificate without a reason. In case they ask for a reason, you can say it's for banking purposes, maybe for a loan. Also, the salary certificate would suffice the requirements of the salary slip.

Hope it's clear now.

Regards,
AJ

Dear AJ,

Thank you a lot for your guidance. I am now clear on what you said. So, that means I need to get a salary certificate/structure on the letterhead from the parent company, i.e., the consultancy, and not from the MNC. I was confused with the definition, that's why I was not clear. Okay, and I also got the point of asking for it for banking purposes.

I am really very thankful to you for all your concern and support, and hope to hear from you in the future, just like today.

Thank you.

Regards,
Gipsy

Payslips are very important for multiple purposes.

1. Very importantly for Income Tax purposes (if applicable).
2. For availing any financial assistance in banks.
3. To know the credibility of the organization (to understand whether all the deductions are properly made or not).
4. For our future career advancement. Without proof of a salary slip, nowadays, none of the companies will release offers to new candidates. The payslip shows the real net monthly income for an individual and provides insight into the systems of the previous company.

Kindly let me know if you need any further assistance.

If a company is not providing the payslip, you can ask for the salary certificate. You can use this certificate for many purposes like a bank loan and even in any interview.

Hi Sudipto,

As far as the salary slip is concerned, it shows everything you receive and deduct like P.F. Amt., Gratuity, any bonuses, any installments of a loan taken from the company, and many more from your salary, right?

Now, from that slip, you can verify the balance amount (Pending amount with interest if any with the company) of the same. If you receive it regularly, then it is ok. But when you get the slip after 2 months, excluding February and March, then I think it is better to check all the balances and pending amounts, if any, that I feel. Otherwise, it is ok. If the company does not provide it to you for any months, Form No. 16 will solve the problem if you are going to change the job and the new company asks for the salary slip.

Yes, if anyone is going to change the job in that month or the very next month, he will not have the salary slip. But even at that time, one can explain the situation and solve the problem with the help of bank statements or old salary slips.

One more thing, if that person got an increment between those days, then only the bank statement will suffice.

If this becomes even more challenging, then leave it to GOD, hahaha.

But as per my knowledge, if a company does not provide a salary slip for a particular month, then I don't think there can be any problem.

---
I have corrected the spelling, grammar, and punctuation errors in the text and ensured proper paragraph formatting. The original meaning and tone of the message have been preserved.

Hi Sudipto,

Normally, if you are going to another company, they will definitely ask for salary slips for at least 3 months. So, it is better to have all the month's payslips.

Regards,
kk

Hi all,

Thanks to everyone for all your answers. I am really feeling strong now.

Deepthi Raghunath, this is for you: Most of the months I receive salary through the bank, but in those specific months, we received salary through a cheque.

To All:

Does anyone smell a fish? (With all respect to all policy managers and HR, I don't want to hurt anyone, but you all must admit lots of things happen in this world.)

I am really flabbergasted after this post has received so much response. I never expected this.

I will come up with lots of ignored issues like this that I am seeing in my short career span of 1.5 years. I have lots on hand. Need to get some spare time for a post. I am just curious, being a Software Developer, to know "How things work," validate all processes until it reaches the "Heart of the Matter," and finally (if possible) fix bugs.

Hi,

As far as I am concerned, the payslip can be used as proof of your experience, and your payslip will show the deduction of tax. A payslip can be crucial during legal action against a company when they fail to inform you of any tax deductions. So, be smart in obtaining the payslip. 😉

Remember, a payslip is not just a document for your current salary but can also serve as evidence of your employment history and financial transactions. Make sure to keep your payslips safe and organized for future reference.

Best regards, [Your Name]

Hi,

I have a strange query. For the past 8 months, I have been unemployed, but now, I want to start working again. However, while moving from one city to another, I lost all my work experience, appreciation, and even salary slips from my last organization. I also do not have any bank statements. Although I have managed to find a few of my documents, I am unable to retrieve my last job's credentials.

Now, wherever I go, everyone asks for the salary slip which I do not have, and my previous company is not willing to provide it as it is now owned by a different employer and has started its operations anew. Can anyone suggest what I should do?

Thanks in advance.

Payal

Hey Payal, so sad for you.

Anyways, first of all, register an FIR or you can say 'Zero' entry for your lost documents. It may help you to proceed further.

Take a copy of the FIR along with your appointment letter (Hope you have a copy of it) and go to your old employer and tell them about the situation. They may issue a duplicate Salary Slip for your last 3 months' salary.

One more thing, you might have received a Form No. 16 from the old employer at that time. It will be considered at your new employer. Just go and ask them about the situation.

Moreover, if you received your salary by cheque, then you can get the statements from the bank.

Hope this will provide some help.

Wishing you the best of luck.

Hi Payal,

I would be a bit blunt here. I might be able to understand your situation, but none of the employers will. Your story is too complicated, and it seems like luck and the world are targeting you for everything.

In the first place, if you tell your new employer that you have lost all your documents, then you will be considered as an irresponsible person for not being able to manage some of your most important documents.

For your bank statement, it's quite easy. You can approach your bank where you have an account and request them for your bank statement. After making a small payment, they will deliver your entire banking data. This can be used as proof of your prior salary.

Regards,
AJ

It is utmost important that information on an employee's earnings is available to him, and the best method will be through a pay slip. The details there are self-explanatory and give him the trust and confidence towards the organization, besides the statistics it provides.

Dear Sudipto,

In the Salary Slip, the details of the breakup of your salary are shown by the company. In Form 16, details of the salary for the financial year will be reflected. So, it is better if you can ask for the Salary Slip every month. If your company does not provide such a slip, then there may be some problem in the accounting department or HR department. If you receive your salary slip, you must find your salary details and total deductions in detail. Therefore, this is necessary for your ready reference to determine whether the deductions are genuine or not.

Basudeva Choudhury

Hi,

A salary slip indicates what you earn during the month. It is mandatory on the part of the employer to issue a salary slip to its employees under the labor Act.

Regards,
M. Krishna Raj Urs

Hi Sudipto,

The employer generally asks for the last payslip. Form 16 is a document in which the annual income and deduction part is displayed. Nowadays, many companies are issuing computer-generated payslips where a signature is not necessary. A payslip is a ready document for every month, so the employer is bound to provide it.

Thanks,
rrtpan

Hi Sudipto,

A salary slip is required to prove that you have been paid for the work done and to acknowledge the same in an organization. Its importance depends on your future requirements for a new job change and when demanding a higher salary compared to what you have been receiving.

Form 16 and Form 16 A are necessary for filing income tax returns every financial year by the employer. These forms contain details of the salary paid for the year and any remittances made to banks where TDS is deducted or effected.

The importance of a pay slip is relevant and significant considering the valuable explanations provided by other members and as stated by me above. It is up to you to understand from all responses posted.

Warm Regards,
G. Nijampure

Dear team,

It is important that whoever works in the company, whether in HRMS or any other department, should provide their payslip for further purposes.

Thank you.