Salary components CTC Vs Gross Salary Vs Net Salary What is CTC?ĬTC or Cost To Company is the expense that the company incurs upon hiring an employee. According to labour laws, salary slip or wage slip must be given to all employees. This is not necessary in digital slips though. If salary slip is given physically then it needs to have the company stamp and signature. Whereas salary is given to employees working in an office. Technically, wages is given to unskilled workers in factories and labourers. There is a minor difference between wage and salary here. Furthermore, when joining a new company, the previous company’s salary slip may be asked for as proof of earlier employment.Īs per the law, a wage slip and not salary slip is mandatory.

Increment proof – The salary slips also serve as proof for increment an employee receives during their tenure at a company.

Alimony ground – When discussing alimony in a divorce proceeding, the couple’s salary slips are discussed to see if and how much alimony one spouse will have to pay to the other.

This serves as proof that one has employment and social life in the native country and will not flee to the foreign country.

Visa application – When applying for a visa to visit a foreign country, one needs to procure their salary slip.

They are also used to calculate the amount of income tax one has to pay. Hence, salary slips serve an important purpose as one’s proof of income.

Income tax calculation – Any person earning over Rs 5 lakh a year has to pay income tax to the government.

Learn more about what is term insurance and how to get it in How to Select the Best Term Insurance Plan. However, a salaried employee needs to show their salary slip for the past few months and that is enough.

Term insurance – When applying for term insurance, a business person or professional needs to show their income tax returns for the past 3 years.

The salary slip serves as proof in such cases.

Loan or credit card – When applying for any loan or credit card, one has to provide proof of income to the bank.

There are multiple benefits of receiving a salary slip as follows: This can be for PF, ESI, being late to office or unpaid leave, etc. Additionally, it also details any deductions which employer is making on employee’s salary.

This will include components such as basic wages, HRA, LTA, bonus, etc. It details the various components which the employer is paying the employee on a monthly basis. It is given to the employee every month by the employer. A salary slip is essentially a legal document which serves as a proof of salary payment.

Ctc salary slip format