House Rent Allowance (HRA):Īs the name suggests, this is an addition to the basic salary given to the employee for their house rent. This is made up of about 35% to 40% of your total salary. This is the base amount of your salary before any dedication or addition. Basic Salaryīasic salary is an essential component of salary slip. The following salary slip components appear under the incomes part of the salary slip: 1. If you look at your salary slip(s), you will see many components, all of which you probably won’t understand, but worry not, we will cover them here.Ĭomponents of a salary slip can be understood in two parts: Let’s look at the common components of payslips. Although most of the companies give them out via emails, some companies still give out hard copies. It helps you in calculating who much to be paid and how much can be reclaimed.Īlso Read: Declaration in Resume For Freshers | 15+ Examples & Tips Components of a Salary SlipsĮach month employees receive their salary statements which the employers make. Moreover, bear in mind that the HR person of the new company you are about to join will ask for your salary slips of at least the last 2 months of your previous employment.Īs your salary slip contains components such as house rent, travel, medical allowances, among others, You can use it to prepare the income tax returns. You can ask for a salary hike based on your last payslip. When changing companies, salary slips are your weapons during salary negotiation. Your salary slip can act as proof that you have a valid income to pay them back every month (or the payment plan chosen by you). When applying for a loan or credit card, the bank or creditor needs to be assured that you have a concrete plan and a way to pay them back. This will show them your designation and your last drawn salary. In that case, you need to provide a document that shows proof of employment. Suppose you want to apply for a visa or to universities. Here are some of the reasons why it is important to keep your payslips safe: So, it would help if you always kept them safe as you would other important documents. They are legal proof that you are a salaried employee. Salary slips are pretty crucial in the world of work.