Salary Slip (Payslip) in India: Format, Components, Rules

A salary slip in India, also called a payslip or pay stub, is the monthly statement an employer issues to each employee that sets out gross earnings, statutory deductions, and net take-home pay. For a foreign company running an India team, it is the document that proves payroll is being handled compliantly.

This guide explains what a salary slip is, whether it is legally required, the mandatory components and format, how to read one, how net pay is worked out, what employers must do, and how global companies issue compliant salary slips in India without a local entity.

What is a salary slip in India?

A salary slip is a monthly document that shows how an employee's pay is built and settled. It lists gross earnings, every statutory deduction, and the net amount credited to the bank. It serves as proof of income for the employee and as evidence of statutory compliance for the employer.

Salary slip, payslip, and pay stub mean the same document in India, and the three terms are used interchangeably. Pay stub is the term a US employer will recognise, while salary slip and payslip are the everyday terms used across Indian payroll.

It is issued every pay cycle, almost always monthly, and shared as a PDF or through an employee self-service portal. See: what a payslip is.

Is a salary slip legally mandatory in India?

Yes. A wage slip is a statutory requirement. Under section 50(3) of the Code on Wages, 2019, in force since November 21, 2025, every employer must issue a wage slip in the prescribed Form V, electronically or on paper, on or before the payment of wages for each wage period.

The particulars and format sit in the Code on Wages (Central) Rules, notified on May 8, 2026. Labour is a concurrent subject, so central and state rules both apply, and some states are still notifying their own rules as of August 2026.

This is not a formality. The wage slip is how an employer demonstrates that wages were paid in full and on time and that EPF, ESI, professional tax, and income tax were deducted correctly, which matters in any audit, inspection, or employee dispute.

What are the mandatory components of a salary slip in India?

An India salary slip has two halves: earnings and deductions. Earnings include basic pay, dearness allowance, house rent allowance, and other allowances. Deductions include the employee's EPF, income tax (TDS), professional tax, and ESI where it applies. Gross earnings minus total deductions gives net, or take-home, pay.

Earnings

Earnings are the components that add up to gross pay. Basic pay is the fixed core, usually 40% to 50% of cost to company, and it drives EPF and gratuity. House rent allowance, dearness allowance, conveyance, and special allowance sit on top. For how each head is set, read our guide to salary structure in India.

Some earnings change month to month, such as overtime, incentives, and performance bonuses. These appear on the slip only in the periods they are paid, so gross pay can move even when the fixed salary does not. Read: variable pay in India.

Deductions

Four statutory deductions appear on most India salary slips:

• Employee EPF: 12% of basic pay plus dearness allowance from the employee, matched by the employer, on a wage ceiling of $160 (about ₹15,000) a month. See our explainer on the employees' provident fund, administered by the EPFO.
• Employee ESI: employees earning $220 (about ₹21,000) a month or less are covered, with 0.75% from the employee and 3.25% from the employer. Read what Employees' State Insurance covers, run by the ESIC.
• Professional tax: a state levy capped at $26 (about ₹2,500) a year, charged by states such as Karnataka, Maharashtra, and Tamil Nadu, and not levied at all in Delhi, Haryana, and several others. Here is how professional tax works.
• TDS (income tax): deducted every month under the Income-tax Act, 2025 based on the employee's projected annual income and chosen tax regime. See how tax deducted at source is calculated.

Which deductions apply depends on the employee's wages and state of work, so two people on the same team can show different lines on their slips.

Employer contributions

A compliant slip usually also shows what the employer pays on top of gross salary. The employer's 12% EPF share, its 3.25% ESI share where ESI applies, and the gratuity provision are the employer's cost, not deductions from the employee. For the full picture, read our guide to PF, ESI and gratuity obligations.

These employer contributions are part of the cost to company but never reduce take-home pay. Showing them on the slip helps employees see the full value of their package. Read: statutory employee benefits in India.

Here is what each section of a standard India salary slip contains:

What does a sample salary slip format look like?

A sample salary slip lays earnings on one side and deductions on the other, then shows gross pay, total deductions, and net pay. The example below is for an employee on about $525 (₹50,000) gross a month. It is illustrative, and real figures depend on the salary structure, state, and tax regime.

In this example ESI does not apply, because gross pay is above the $220 (about ₹21,000) monthly threshold. Professional tax and TDS vary by state and tax regime, so use the current India payroll tax rates when you build a real slip.

How do you read a salary slip in India?

To read a salary slip, start with gross earnings, subtract each deduction line, and confirm the result matches the net pay credited to the bank. Check that basic pay is at least half of gross, that your UAN and PAN are shown, and that EPF, TDS, and professional tax look correct for the month.

Also check the attendance or paid-days line, because unpaid leave reduces earnings for that cycle. A short month or a mid-month join shows up here first. Read: loss of pay in salary.

How is net (take-home) pay calculated on a salary slip?

Net pay equals gross salary minus the employee's deductions. From gross pay, subtract employee EPF, TDS, professional tax, and ESI where it applies. The result is the take-home amount credited to the bank. Our guide to take-home pay in India walks through the full method.

Take-home is typically around 70% to 85% of gross for most salaries, depending on the deduction mix and whether the employee is on the old or new tax regime. It is easier to reason about once you know the employee's cost to company.

Are digital salary slips valid in India?

Yes. The Code on Wages allows a wage slip to be issued electronically or on paper. Most employers deliver a PDF by email or through a self-service portal, which banks and background checks accept. What matters is that the slip is issued each cycle and shows the required particulars, in step with the payroll cycle in India.

What are an employer's payslip obligations in India?

An employer must pay wages on time, deduct and deposit the statutory amounts, issue a wage slip on or before payment, and keep payroll records. Monthly wages are due by the seventh day of the following month under the Code on Wages. Missing any of these is a payroll compliance in India failure.

Records must be retained for audits and inspections, and the statutory filings for EPF, ESI, professional tax, and TDS each have their own monthly and quarterly deadlines. Our monthly compliance calendar sets out when each one falls.

Generating the slip itself is the last step of a repeatable cycle: collect data, compute earnings, apply deductions, issue the slip, and file returns. See the full India payroll process for the sequence.

In many companies the payroll team owns the slip while HR owns the employment terms behind it. Knowing who owns each statutory obligation avoids gaps at month end.

For an end-to-end view of running compensation in India, from onboarding to statutory filing, start with our pillar guide to payroll in India.

Salary slip vs Form 16: what is the difference?

A salary slip is a monthly statement of earnings and deductions, while Form 16 is an annual certificate of the income tax deducted from an employee's salary across the financial year. Employees use the salary slip as monthly proof of income and Form 16 to file their income tax return.

One change to note: under the Income-tax Act, 2025, in force from April 1, 2026, the salary TDS certificate that was Form 16 is now issued as Form 130. The document does the same job under a new name, and it is filed on the income tax portal.

What payslip mistakes do employers make in India?

The most common salary slip errors are setting basic pay below the wage-code threshold, leaving off the UAN or ESI number, miscalculating or skipping a statutory deduction, using the wrong pay-period dates, and simply not issuing a slip. Each one can create compliance exposure or an employee dispute. The recurring ones are:

• Wrong basic ratio: the Code on Wages defines wages so that excluded allowances cannot exceed 50% of total pay, so a basic set below half of gross now breaches it.
• Missing identifiers: no UAN, PF, or ESI number shown on the slip, which employees need for their own records.
• Deduction errors: TDS worked out on the wrong regime, or professional tax skipped in a state that levies it.
• No slip issued: failing to provide a wage slip each cycle, which is a direct breach of the Code on Wages.

For founders setting this up from scratch, these are exactly the traps a payroll partner removes. Read: how US startups run India payroll without an entity.

How do foreign companies issue India payslips without an entity?

Foreign companies issue compliant India salary slips by using an Employer of Record (EOR). The EOR legally employs your team in India, runs monthly payroll, deducts EPF, ESI, professional tax, and TDS, and issues a statutory wage slip each cycle, so you hire without setting up a local entity.

Wisemonk is an India-native Employer of Record that helps global companies hire, pay, and manage talent in India without the overhead of a local entity. We run end-to-end India payroll for 300+ global clients and 2,000+ employees, have processed over $20M in payroll, and hold a 4.8/5 rating on G2, with EOR pricing from $99 per employee per month.

Every pay cycle we generate component-wise salary slips, calculate and file EPF, ESI, professional tax, and TDS, and keep your records audit-ready. To hand off the whole cycle, see how our managed India payroll runs it for you.