How to Read a Salary Slip

A salary slip records earnings, deductions and net pay for a pay period. The labels and calculations differ by employer, employee category and applicable law. Treat the example fields below as a reading guide: statutory contributions and tax cannot be calculated from a component name alone.

Common salary-slip sections

Section	What to check
Basic pay and other wage components	Check the amount, pay period and how the employer classifies each component. The labour-code wage definition may affect statutory calculations; “basic” is not automatically the complete statutory wage base.
Allowances and reimbursements	Check the policy and supporting records. Tax treatment depends on the current tax year, the payment and the employee’s circumstances.
Gross earnings	Reconcile fixed pay, attendance-based pay, overtime and variable earnings against the employment terms and attendance records.
Employee deductions	Check EPF, ESIC, Professional Tax, tax withholding, authorised advances and other deductions against the applicable rule and employee record.
Employer contributions	Some employer-paid statutory contributions may be part of total remuneration but not reduce the employee’s take-home amount. Check the payslip or CTC statement for how they are presented.
Net pay	Gross earnings minus deductions, subject to the employer’s payroll conventions and any adjustments shown separately.

Check common deductions

EPF

EPF treatment depends on coverage, membership history, the applicable scheme, statutory wage base and any permitted higher-wage arrangement. Do not assume every employee’s contribution is always 12% of the line labelled “basic” or that the employer contribution is split identically for every member. Compare the payslip with the EPFO passbook and current member record.

ESIC

ESIC coverage and contributions depend on the establishment, employee’s applicable wages and current coverage rules. The Ministry FAQ dated 16 March 2026 states that the Code’s wage definition applies and that the ₹21,000 monthly wage ceiling continues as of that FAQ. Check current ESIC instructions for the employee’s case and contribution period.

Professional Tax

Professional Tax is state- and local-authority specific. In Kerala, check the current applicable schedule and the employee’s earnings for the relevant half-year rather than assuming one monthly amount applies to every employee.

Income-tax withholding

For payments from 1 April 2026, the Income-tax Act, 2025 and Income-tax Rules, 2026 govern the relevant tax year. The tax regime, income, declarations, evidence and current rules affect withholding. Do not reuse old allowance exemptions or form names without checking the official Income Tax Department guidance.

A quick review checklist

Confirm that the employee name, pay period and attendance are correct.
Reconcile earnings with the employment terms, approved overtime and variable-pay records.
Check each deduction against the applicable statutory record or written authorisation.
Compare EPF deductions with the EPFO passbook and review ESIC coverage where applicable.
Ask payroll for an itemised explanation when a component changes or a deduction is unfamiliar.

Official references

For take-home estimates using stated assumptions, try our CTC to in-hand calculator.

How to Read a Salary Slip