Salary Slip Format — Components, CTC vs Net Salary Explained
Updated: 3 June 2026 | Income-tax Act, 2025 | India payroll norms
A salary slip (pay slip) documents all salary components. Earnings include Basic pay, HRA, DA, and allowances. Deductions include Employee PF (12% of basic), Professional Tax, Income Tax (TDS), and ESI. Net Salary = Gross Earnings − Total Deductions. CTC is larger than take-home — it includes Employer PF (12% of basic), gratuity provision (~4.81% basic), and insurance, which do not form part of the cash received.
CTC ≠ TAKE-HOME
Your CTC includes employer costs you never receive as cash.
Employer PF (12% of basic) + gratuity provision (~4.81%) + insurance typically adds 20–25% on top of your take-home gross. Divide CTC by ~1.22 to estimate gross take-home.
Employer PF (12% of basic) + gratuity provision (~4.81%) + insurance typically adds 20–25% on top of your take-home gross. Divide CTC by ~1.22 to estimate gross take-home.
Standard Salary Slip Components
The following components appear on a typical private-sector salary slip in India. Government/PSU salary slips may additionally include DA, TA, and city compensatory allowances.
| Component | Description | Taxability |
|---|---|---|
| EARNINGS | ||
| Basic Salary | Usually 40–50% of CTC; base for PF, gratuity calculation | Fully taxable |
| House Rent Allowance (HRA) | Usually 40% (non-metro) or 50% (metro) of basic | Partially exempt under Section 10(13A) — old regime only |
| Dearness Allowance (DA) | Common in government/PSU; percentage of basic linked to CPI | Fully taxable |
| Special Allowance | Variable performance or role-specific top-up | Fully taxable |
| Leave Travel Allowance (LTA) | Travel reimbursement for self and family | Exempt up to 2 journeys in a 4-year block (old regime) |
| Medical Allowance | Monthly fixed medical payment (if applicable) | Fully taxable (flat ₹15K exemption removed from FY 2018-19) |
| Children Education Allowance | ₹100 per child per month | Exempt up to ₹1,200/year per child (max 2 children) |
| DEDUCTIONS | ||
| Employee PF Contribution | 12% of Basic + DA (if EPFO-covered establishment) | Eligible for Section 80C deduction (old regime) |
| Professional Tax | State-specific levy; max ₹2,500/year | Deductible under Section 16(iii) — both regimes |
| Income Tax (TDS) | Monthly TDS on estimated annual salary income | Section 192 TDS — credited in Form 26AS |
| ESI Contribution | 0.75% of gross wages (only if gross salary ≤ ₹21,000/month) | No income tax deduction available |
| Loan / Salary Advance EMI | Recovery of company-provided loan (if any) | No income tax effect |
Sample Salary Slip Calculation
Example: Mid-level employee in a metro city, monthly CTC ~₹90,000.
| Component | Amount / Month |
|---|---|
| EARNINGS | |
| Basic Salary | ₹40,000 |
| HRA (50% of basic — metro) | ₹20,000 |
| Special Allowance | ₹15,000 |
| Gross Earnings | ₹75,000 |
| DEDUCTIONS | |
| Employee PF (12% of ₹40,000) | − ₹4,800 |
| Professional Tax | − ₹200 |
| Income Tax TDS (est.) | − ₹3,500 |
| Total Deductions | ₹8,500 |
| Net Take-Home Salary | ₹66,500 |
CTC for the above employee would be approx. ₹90,000/month: Gross ₹75,000 + Employer PF ₹4,800 + Gratuity provision ₹1,604 + Insurance ₹700 + other benefits ≈ ₹82,000–₹90,000.
CTC vs Gross Salary vs Net Salary — Key Differences
Broadest measure
Cost to Company (CTC)
Everything the employer spends: Gross salary + Employer PF (12% basic) + Gratuity provision (~4.81% basic) + Health insurance + Other perquisites and benefits.
Before deductions
Gross Salary
All cash earnings: Basic + HRA + DA + Special Allowance + all other allowances. Before PF, PT, TDS, ESI are deducted. Shown on salary slip.
What you receive
Net / Take-Home Salary
Gross Salary minus all deductions: Employee PF, Professional Tax, Income Tax (TDS), ESI. This is the amount credited to your bank account.
Quick formula: Net Take-Home = Gross Salary − Employee PF − Professional Tax − TDS − ESI. To estimate from CTC: Net ≈ CTC ÷ 1.22 to 1.25 (for employees in the 30% bracket with standard PF).
Frequently Asked Questions
What is the standard format of a salary slip in India?
There is no legally mandated format in India, but a valid salary slip should include: employer name and address, employee name, ID, and designation, pay period (month/year), all earnings components (Basic, HRA, DA, Special Allowance, etc.), all deductions (PF, Professional Tax, TDS, ESI), gross salary, net take-home salary, and an employer/HR signature or digital authentication. The slip should match Form 16 and PF records.
Is a salary slip legally valid as income proof?
Yes. Salary slips are widely accepted as income proof for bank loans, credit card applications, house rent (as proof of income to pay rent), and income tax purposes. They should be consistent with Form 16, Form 26AS, and PF contribution records. Banks typically ask for the last 3–6 months of salary slips when processing a loan application.
How is TDS calculated on a salary slip?
The employer estimates the total annual tax liability (based on projected annual salary, chosen regime, and declared deductions) and divides by 12 to arrive at a monthly TDS figure. If the employee changes tax regime, submits new investment proofs, or receives a bonus mid-year, the monthly TDS amount is adjusted prospectively to ensure the correct annual tax is recovered by March.
Can I download my salary slip online?
Most companies use HRMS (Human Resource Management System) portals — common platforms include Workday, SAP SuccessFactors, Darwinbox, Keka, Greytip, and BambooHR — where employees can log in and download monthly salary slips as PDF. If you are unsure of the portal, contact your HR or payroll team for the link and login credentials.
What if my Form 16 does not match my salary slips?
Cross-check each month systematically. Common reasons for discrepancy: mid-year tax regime change, bonus or arrear payments not reflected in slips, TDS adjustments in the last quarter, or employer errors. Use your monthly salary slips alongside Form 26AS and AIS (Annual Information Statement) on the income tax portal to reconcile. If you still find an error, request a corrected Form 16 from your employer before filing ITR.
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