What is a Payslip? Get to Know How to Make One & its Components

![Payslip.jpg](https://clockster-blog.storage.yandexcloud.net/Payslip_e84860572d.jpg) Salary is an essential aspect in a workplace, where a company is required to provide a payslip for the employees as evidence and as a form of transparency. However, it cannot be done improperly because miscalculations can harm one party. Therefore, management is required to understand the right ways of creating a payslip based on the standards. Here you can learn how to create an employee salary slip. ## What is a Payslip? A payslip is an official document that details an employee's monthly salary and tax deductions. Each employer has different regulations regarding compensation deductions, such as those for health and other insurance payments. The Labor Law No. 13 of 2003 does not require employers to give employees a payslip. However, as explained in Article 17 of Government Regulation Number 78 of 2015 concerning Wages, companies are obligated to submit documentation of wage payment including details of payments received by workers/laborers at the moment the wages are paid. ## Why is a Payslip Essential? Turns out, payslip is not only used to provide transparency between workers and management. Here are the additional functions of a monthly salary slip. **Provides detailed information about employees’ salary** It is used to provide information about the money that employees earn per month. A salary slip usually contains three sorts of calculation components: base salary, deductions and bonuses, and the nominal net salary received. You may evaluate your month's performance through those details. For example, whether or not there are salary reductions for rule violations such as coming late or bonuses because you have achieved your target this month. **Used in applying for a credit card** This document is required when you are about applying for a credit card. It acts as proof that you have steady work and will be able to pay off the payments. **Salary Negotiation** You have to save your salary slip although you are about to move to another company. It might be useful to negotiate the amount of payment in your new job. This document will be considered by the employer in determining your salary range. ### See also: <u>[What are Employee Benefits? Definition and the Types](https://clockster.com/en/blog/employee-benefits/)</u> ## How to Create a Payslip for Employees Although it is not difficult to create a wage slip, the format must adhere to the standards. For creating employee payslip, here are several components and formats to consider. ### Payslip Components What are the details found on a payslip? A payslip is more than just a letter with a nominal wage; it must also include the following elements. #### **Basic Salary** Basic salary is paid based on their position or responsibilities. Companies normally have criteria for splitting basic compensation depending on job and career path, which represents an employee's competence and qualification. #### **Allowance** As a type of social compensation or performance incentive, allowance is an additional sum added to the base wage. Job compensation, transportation, lodging, and food are all included in this category. #### **Salary Reductions** Salary deductions include taxes, debts, and insurance. This type of reduction varies depending on corporate policies and personal requirements, such as whether the employee has a credit card debt for certain purchases. #### **Additional Incentives** Other incentives include yearly commissions or bonuses, as well as overtime compensation. Overtime compensation is paid if the employee works for more than 40 hours a week. ## Format of Salary Slip The components of a salary slip may vary depending on the company, but the standard format of the document remains the same. This format must be followed when creating employee payslips so that the information included in them may be regarded as correct. **Company Name** In the letterhead, include the name of the company. This is one of the most important parts of a salary slip since it verifies that the company issued the document. **Confidentiality of Documents** Payslips frequently have the words "Private and Confidential" at the bottom of the company name. This is a declaration that the wage slip document contains confidential information that only the company and the employee have access to. **Employee Information** The receiving employee's information must also be included in the salary slip. This data includes name, employee number, department of the company, and NPWP (Taxpayer Identification Number). **Salary and Deductions Amount** The amount of salary and deductions are other important elements of payslips. Calculating additions and deductions from the base salary, as well as allowances and other incentives, are all part of this process. BPJS health payments and other debts. **Information on Payment** The salary payment statement includes the current month's tax, the current year's income before and after taxes, the total amount paid to workers, the payment bank's name, and the date of payment. All calculations must be written down on a salary slip so that employees can see the details of their pay. The corporation will then provide this wage slip document to its employees, either in digital form or in physical copy. ## Example of Payslip Here are some examples of payslips. **Payslip Example 1** ![Payslip example.jpg](https://clockster-blog.storage.yandexcloud.net/Payslip_example_5188d7f139.jpg) **Payslip Example 2** ![Payslip example (2).jpg](https://clockster-blog.storage.yandexcloud.net/Payslip_example_2_a08095d605.jpg) **Payslip Example 3** ![Payslip example (3).jpg](https://clockster-blog.storage.yandexcloud.net/Payslip_example_3_1a95d624b9.jpg) That’s all about a salary slip that you need to know. This document is essential for a company and the employees themselves. If you're about to create one, you can utilize certain software, or a Microsoft word and excel will do as long as the salary slip contains the elements above. ### See also: <u>[What is Payroll? Definition and Explanation on How It Works](https://clockster.com/en/blog/what-is-payroll/)</u>