Salary Certificate Details: Should It Include Bonuses and Leave Encashment?

Salary Certificate Components

I am going to issue a Salary Certificate to one of our employees for the last financial year. Please confirm whether the Salary Certificate should contain only the components mentioned in the Pay Slip or if it should also include Bonus, Leave Encashment, etc.

Waiting for your valued response.

Regards,
Subrata Singha

The salary components included in the salary slip will suffice. There is no need to mention bonuses, leave encashment, or any other additional items.

Regards,
Shreya Parikh
(HR)

Well, you can go with both options as per your choice, but my point is what will be the difference in the salary certificate if it is the same as the payslip. So, it's better if you mention all the amounts credited to the employee's account. First, you should mention the salary and deductions as mentioned in the payslip, and below you can mention the bonus, incentives, leave encashment, etc.

Leave Encashment in Salary Certificates

Leave encashment is not a regular payout. You can capture only the regular payouts in the salary certificate.

Regards, Pon

A salary certificate will only include the base salary/CTC. Any other components apart from CTC, such as bonus, incentives, gratuity, overtime, etc., will not be a part of the salary certificate.

The components to be reflected in the annual statement that you are to issue depend upon the purpose for which it is being issued. If it is being issued for a loan purpose (please make a mention of the purpose always at the end of the certificate), you should include the regular components of salary payable, regular/statutory deductions, and Net/Take-home salary details. If it is being issued for Income Tax purposes, i.e., in the form of Form-16, you need to include all the payments made, including Bonus, Leave Encashment, incentives paid in cash - if any, etc. This will also include the TDS during the financial year in question.

Best Wishes.

Regards,
AK Jain HR Personnel NCL, CIL