How to Make a Salary Slip: Components, PF, ESI and a Sample
Make a correct salary slip in India: Basic, HRA, allowances, PF at 12% of basic, ESI up to Rs 21,000 gross, professional tax and TDS, with sample slips.
A salary slip (payslip) is the monthly statement an employer gives to each employee showing what they earned, what was deducted and what was paid. Employees need it for loans, visas, rental agreements and tax filing; employers need it to show compliance with PF, ESI and tax rules. Getting it right is mostly a matter of understanding a handful of components.
Create one quickly: the free Salary Slip Generator calculates totals, shows the net pay in words and exports a clean PDF. Company details are remembered in your browser for next month.
What a salary slip must show
- Employer name, address and logo.
- Employee name, employee ID, designation, department and date of joining.
- Pay period (month and year), paid days and loss-of-pay days.
- PAN, UAN (PF number) and ESI number where applicable, plus bank account (partly masked).
- Earnings, itemised.
- Deductions, itemised.
- Gross earnings, total deductions and net pay, in figures and words.
The labour codes that came into force in November 2025 require employers to issue wage slips. Check the rules notified by your state for the prescribed format and whether an electronic slip is sufficient.
Earnings components
| Component | What it is | Tax treatment (summary) |
|---|---|---|
| Basic salary | The core fixed pay. PF, gratuity and often HRA are calculated from it. | Fully taxable |
| Dearness allowance (DA) | Common in government and some private jobs; added to basic for PF. | Fully taxable |
| House rent allowance (HRA) | Usually 40–50% of basic. | Partly exempt under the old regime; see HRA guide |
| Special allowance | Balancing figure that makes up the rest of gross salary. | Fully taxable |
| Conveyance, medical, LTA, others | Company-specific allowances. | Mostly taxable; some reimbursements exempt under the old regime with bills |
| Bonus, incentives, overtime | Variable pay for the month. | Fully taxable |
The 50% wages rule
Under the Code on Wages, "wages" (broadly basic pay, DA and retaining allowance) should be at least half of total remuneration. If excluded allowances exceed 50%, the excess is treated as wages for purposes such as gratuity and, per the codes, social security contributions. In practice, many employers now set basic plus DA at 50% of gross or more. How EPFO and ESIC apply this is still being clarified in some areas, so check current guidance on epfo.gov.in and with your payroll adviser.
Deductions
Provident Fund (EPF)
- Employee contributes 12% of basic plus DA.
- Employer also contributes 12%: 8.33% goes to the Employees' Pension Scheme (EPS), capped at ₹1,250 a month (8.33% of ₹15,000), and the rest goes to the employee's EPF account.
- PF is mandatory on wages up to ₹15,000 a month. Where basic plus DA is higher, many employers limit contributions to 12% of ₹15,000 (₹1,800), while others contribute on the full basic. Both are allowed, subject to the scheme rules and the employee's consent.
- The employer also pays EDLI and administration charges (each 0.5% of wages up to the ceiling at the time of writing), which do not appear as deductions on the slip.
You can project the PF corpus with the EPF Calculator.
Employees' State Insurance (ESI)
- Applies where the employee's gross monthly wages are ₹21,000 or less (₹25,000 for persons with disability) in establishments covered by ESI.
- Employee contributes 0.75% of gross wages; employer contributes 3.25%.
- Coverage is decided per contribution period (April–September and October–March). An employee covered at the start of a period stays covered for that period even if wages later exceed the ceiling.
- Check the current ceiling and rates on esic.gov.in.
Professional tax (PT)
Professional tax is a state levy, capped by the Constitution at ₹2,500 a year. Slabs and rates vary by state; for example, Maharashtra and Karnataka charge up to ₹200 a month, with ₹300 in February, above set salary thresholds. Some states, such as Delhi, Uttar Pradesh and Haryana, do not levy it at the time of writing. Always check your state's commercial tax or PT department website.
Income tax (TDS)
Under the income tax law, employers deduct TDS each month based on the employee's estimated annual tax under the regime they have chosen, spread across the remaining months of the year. If projected income is below the taxable limit (for example, up to ₹12.75 lakh salary under the new regime for FY 2025-26), TDS is usually nil. See New vs Old Tax Regime.
Other deductions
Loan or advance recovery, canteen or transport charges, voluntary PF, Labour Welfare Fund (in some states) and loss of pay for unpaid leave.
Sample salary slip 1: gross ₹30,000 a month
| Earnings | Amount | Deductions | Amount |
|---|---|---|---|
| Basic | ₹15,000 | PF (12% of basic) | ₹1,800 |
| HRA (40% of basic) | ₹6,000 | ESI | Not applicable (gross above ₹21,000) |
| Special allowance | ₹9,000 | Professional tax (example) | ₹200 |
| TDS | ₹0 | ||
| Gross earnings | ₹30,000 | Total deductions | ₹2,000 |
| Net pay | ₹28,000 (Rupees Twenty-Eight Thousand only) | ||
The employer additionally contributes ₹1,800 to PF (₹1,250 to EPS and ₹550 to EPF), plus EDLI and admin charges. Those are part of CTC, not of the gross salary on this slip.
Sample salary slip 2: gross ₹20,000 a month (ESI applies)
| Earnings | Amount | Deductions | Amount |
|---|---|---|---|
| Basic | ₹10,000 | PF (12% of basic) | ₹1,200 |
| HRA | ₹4,000 | ESI (0.75% of ₹20,000) | ₹150 |
| Special allowance | ₹6,000 | Professional tax (example) | ₹200 |
| Gross earnings | ₹20,000 | Total deductions | ₹1,550 |
| Net pay | ₹18,450 | ||
The employer additionally pays ₹1,200 PF (₹833 to EPS and ₹367 to EPF) and ₹650 ESI (3.25%).
CTC vs gross vs net
- CTC (cost to company) = gross salary + employer PF + employer ESI + gratuity provision + insurance and other benefits.
- Gross salary = all earnings on the slip before deductions.
- Net (take-home) = gross minus employee deductions.
The Salary Calculator converts CTC into monthly take-home.
Step by step
- Open the Salary Slip Generator and enter company details and logo.
- Add employee details, pay period, paid days and LOP days.
- Enter earnings and deductions, applying the PF, ESI and PT rules above.
- Check that gross, total deductions and net pay are correct, and that net pay in words matches.
- Download the PDF, sign or stamp if required, and share it securely.
Make this month's slips: use the free Salary Slip Generator. It is quick, accurate and private.
Frequently asked questions
How is PF calculated on a salary slip?
The employee contributes 12 percent of basic plus DA. Many employers cap this at 12 percent of Rs 15,000, which is Rs 1,800 a month, while others contribute on the full basic.
When is ESI deducted from salary?
When gross monthly wages are Rs 21,000 or less (Rs 25,000 for persons with disability) in an establishment covered by ESI. The employee pays 0.75 percent and the employer 3.25 percent.
Is professional tax the same in every state?
No. It is a state tax capped at Rs 2,500 a year, with different slabs in each state, and some states do not levy it at all.
What is the difference between CTC and gross salary?
CTC includes the employer contributions to PF and ESI, gratuity and other benefits. Gross salary is the total of earnings shown on the slip before deductions.