Advance Salary Receipt Templates
The monthly salary is sent to the account of the employee. The account sent is always less than what you signed up for in the employment offer letter. It is because of the structure of your salary. Also, the tax implications result in a deduction from your salary. Therefore, it is safe to say that advance salary receipt is not a simple document to deal with. However, it is also not rocket science either.
Here is the basic guide to understanding the elements of the advance salary receipt. The advance salary receipt tells about your take-home salary. The deductions from the whole salary in a particular month. Do not ever correlate the monthly income shown in the salary receipt with the cost of the company or CTC figure.
Your cost to the company includes some variable components, such as, bonuses, etc, that may appear in your advance salary receipt only once or twice a year depending on how it is disbursed by your organization.
Components of Advance Salary Receipt:
The advance salary receipt may have following sections, such as:
- The first section has your personal information. Such as your employer ID, date of joining, number of working days in this month, bank details, account number, leave details of this month and other information is present.
- After this, a regular salary slip has two major components in it. The ‘Earnings’ and ‘Deductions’ section side by side. In earnings, you will have your basic salary. As the name suggests, this makes the very basics of the salary. This is the core of the salary. There are many components of the salary that are counted base on this amount. The basic salary depends on the grade of the employee in the salary structure of the company or organization. It is the fix and the biggest part of the salary of one person. The portion of deductions includes the provident funds, insurances, income taxes, etc. These are the components that reduce the total amount of salary after cutting each month. These components change with the change in the salary of the employee.
Therefore, the net pay that you will get in your account will be the total earnings minus total deductions.
Now, it is clear from the above facts that the basic salary is the most important component of our salary slips as many allowances and deductions are find out by this amount. You can also reduce the income tax component. It is possible by using the tax-saving instruments and take benefits of tax exemptions on various allowances. Also, it is clear from the above discussion that our basic take-home salary and CTC are never the same. The CTC is higher than the basic as the CTC includes the amount of multiple other benefits, such as free food, transport, health insurance, etc.
The salary slip is an important document. It is recommended that a copy of it must be preserved. Almost, 6-month salary slip record must be in there with the employee. It can be made use of for applying for a visa, credit card, etc.