A pharmacy in Bengaluru pays its counter assistant ₹20,000 a month. In September she took two days off without leave, and the owner wants to hand her a slip that she, her bank and a labour inspector would all accept. Most slips that small shops print leave out half of what the law asks for, and put the rest in an order nobody can check.
This post goes through the salary slip components one at a time, then builds her September slip with real numbers from the same engine as our salary slip generator.
Salary slip components the law asks for
Section 50(3) of the Code on Wages makes a wage slip compulsory, and the wage rules made under it set its form. For most private businesses those are your state's rules; the central rules notified in 2026 call theirs Form V. The details a slip carries, grouped the way a reader looks for them:
- Who. The establishment's name and address, the employee's name, their father's or spouse's name, their code and designation.
- When. The wage period, the days worked and the days lost, which is where loss of pay shows up.
- Rate against earned. Each earning at its full-month rate, and what was actually earned this month. Without both, nobody can check the proration.
- Deductions. Each one on its own line: PF, ESI, professional tax, income tax, and any advance or loan being recovered.
- The result. Net pay, in figures and in words, and the date and mode of payment.
A bank reading the slip for a loan also looks for the PAN, the UAN and the salary account number, so put all three on it.
Her September slip, worked out
September has 30 days. She was paid for 28. Each earning is its full rate × 28 ÷ 30:
| Line | Full month | Earned in September |
|---|
| Basic | ₹11,000 | ₹10,267 |
|---|
| House rent allowance | ₹4,400 | ₹4,107 |
|---|
| Special allowance | ₹4,600 | ₹4,293 |
|---|
| Gross earnings | ₹20,000 | ₹18,667 |
|---|
| Provident fund (12% of Basic earned) | | −₹1,232 |
|---|
| ESI (0.75% of gross) | | −₹141 |
|---|
| Professional tax, Karnataka | | ₹0 |
|---|
| Net pay | | ₹17,294 |
|---|
₹17,294net pay for September
28 of 30days paid
₹1,941the pharmacy pays on top
Notice what isn't on it: a line called "LOP deduction". The two lost days show up as 28 paid days and a smaller figure in the earned column. A slip that shows the full ₹20,000 and then takes off a lump for leave looks the same at the bottom, but it breaks PF and ESI, which are worked out on what was earned.
Professional tax is nil because Karnataka charges it only from ₹25,000 of monthly gross. The line stays on the slip anyway, so the employee can see it was checked.
Payslip deductions explained
- Provident fund. 12% of Basic plus DA as earned, usually on a ceiling of ₹15,000. On her slip that's ₹1,232. PF and ESI for a small business covers when it applies.
- ESI. 0.75% of gross, rounded up, only while gross is ₹21,000 or less. Hers is ₹141.
- Professional tax. Set by the state, at most ₹2,500 a year, and some states charge none.
- Income tax. The year's tax spread over the months left. At her pay, the new regime charges nothing. TDS on salary has the monthly working.
- Recoveries. A salary advance or loan instalment, as its own line with the balance left, so it can't be mistaken for tax.
Employer contribution on a payslip: below net pay
The pharmacy also pays ₹1,232 of employer PF, ₹607 of employer ESI and ₹102 in EDLI and admin charges. Those are the employer's costs. Print them in a block under net pay, labelled as the company's share, or leave them off. Put them among the deductions and the employee reads a take-home ₹1,941 lower than it really is, and asks about it. How employer costs sit inside a CTC is in CTC to in-hand salary.
Is a salary slip mandatory under the Code on Wages?
Yes, for every employee, every wage period, whatever the size of the business. The only exception in section 50 is an employer of five or fewer people for farm or household work. The slip goes out on or before the day wages are paid, and it can be printed or sent electronically. Keep a copy: the slips are part of the wage register an inspector asks for first.
Wage slip rules, in short: the slip says what was paid. Making one for money that wasn't paid, to help somebody get a loan or a visa, is forgery, whoever prints it. If a bank wants proof of employment rather than of pay, a
salary certificate is the right document.
Gross vs net salary, and the lines that move them
Gross is everything earned before a single deduction. Net is what reaches the bank. Between the two sit the deductions, and nothing else. A few lines turn up only in some months, and each needs its own place on the slip:
- A part month. Somebody who joined on the 10th is paid for the days they were employed, not the whole month. The slip shows those as paid days, with no LOP against them.
- Overtime. An earning line of its own, with the hours and the rate, so it can be checked against attendance. Overtime pay in India covers the rate.
- Arrears. Money owed for an earlier month, such as a back-dated raise, on its own line and labelled with the months it covers.
- Bonus. An earning in the month it's paid.
Put a one-off in with Basic and the next month's slip looks like a pay cut. Anybody reading two slips side by side should be able to see why they differ.
If you're making slips by hand today, check the last one you issued against the five groups above. Most miss the father's or spouse's name and the days lost, and both take a minute to add.
