Salary Slip Format 2026 with PF, ESI & TDS — Free Template

Why a Standard Salary Slip Format Matters in 2026

Every Indian employer must issue a salary slip that complies with the latest labour and tax regulations. Using a consistent salary slip format helps you avoid disputes, speeds up payroll processing, and provides clear proof for employees during loan or visa applications. The slip also serves as the primary source for statutory filings such as PF, ESI and TDS returns.

According to Internshala, a typical salary slip includes company and employee details, the salary period, and line‑items for earnings and deductions like ESI (shown as 0.00) and TDS (example ₹1,200.00). By following a standard layout you ensure that all required information is present and easily auditable.

Below we break down each section of a modern salary slip, show how to calculate statutory contributions, and provide a free Excel template that you can customise for your business.

Core Components of a 2026 Salary Slip

The salary slip is divided into three logical blocks: company/employee information, earnings, and deductions. Each block should be clearly labelled and presented in a tabular form.

• Company & Employee Details: Company name, GSTIN, address, employee name, employee ID, PAN, bank account (masked), and the pay period.
• Earnings: Basic salary, House Rent Allowance (HRA), Dearness Allowance (DA), Conveyance, Medical allowance, Bonus, and any other allowances.
• Deductions: Provident Fund (PF), Employee State Insurance (ESI), Professional Tax (PT), Labour Welfare Fund (LWF), TDS, and any advances or loans.

Both AttendMitra and their salary slip template illustrate this layout, with separate columns for each component and a final net‑pay column.

When you design your slip, keep the following checklist in mind:

• All monetary values are shown in INR and rounded to two decimal places.
• Statutory deductions are calculated on the correct wage base (e.g., PF on basic + DA up to the ceiling).
• The slip includes a clear “Employer Contributions” row for PF and ESI, as required by law.

Calculating Provident Fund (PF) Correctly

PF is mandatory for employees earning up to the statutory wage ceiling (currently ₹15,000 per month for the employee’s share). The employer contributes an equal amount. The formula is:

Employee PF = (Basic + DA) × 12 %

For example, if Basic = ₹20,000 and DA = ₹5,000, the PF‑eligible wage is ₹25,000, but the employee’s contribution is capped at the ceiling. Hence, Employee PF = ₹15,000 × 12 % = ₹1,800. The employer also contributes ₹1,800, and both amounts appear on the slip under “PF – Employee” and “PF – Employer”.

AttendMitra’s Excel sheet automatically caps the PF calculation at the ceiling, saving you manual checks. If you use NeutronX payroll, the system encrypts PAN and bank details, runs the PF calculation for each employee, and generates PDF payslips ready for distribution.

Working Out Employee State Insurance (ESI)

ESI applies to employees earning ₹21,000 or less per month. The contribution rate is 0.75 % for the employee and 3.25 % for the employer, both calculated on the gross salary (including all allowances).

Example: Gross salary = ₹18,000. Employee ESI = ₹18,000 × 0.75 % = ₹135. Employer ESI = ₹18,000 × 3.25 % = ₹585. These amounts are shown separately on the slip.

The Scripbox guide confirms that ESI should be displayed as a distinct line‑item, and the employer‑paid portion is often reported in the “Employer Contributions” section of the payslip.

NeutronX’s payroll engine automatically computes ESI based on the employee’s gross, encrypts the data, and includes both employee and employer portions in the generated PDF.

Handling Tax Deducted at Source (TDS)

TDS on salary is deducted based on the employee’s estimated annual taxable income, after considering exemptions like HRA, standard deduction, and investments under Section 80C. The exact rate varies, so you should refer to the latest Income Tax slabs on the Income Tax Department site.

In practice, many small businesses use a simple monthly estimate: divide the projected annual tax liability by 12. For instance, if an employee’s projected annual tax is ₹14,400, the monthly TDS = ₹14,400 ÷ 12 = ₹1,200, which matches the example shown by Internshala.

When you generate the slip, list TDS as a deduction line. NeutronX’s payroll module lets you enter the employee’s declared investments, auto‑calculates the taxable amount, and prints the TDS figure on the payslip.

Putting It All Together – A Worked Example

Below is a sample salary slip for an employee named Rahul Sharma for the month of April 2026.

• Basic: ₹20,000
• DA: ₹5,000
• HRA: ₹8,000
• Conveyance: ₹1,600
• Medical: ₹1,250
• Gross Salary: ₹35,850
• PF (Employee): ₹1,800 (capped)
• PF (Employer): ₹1,800
• ESI (Employee): ₹0 (salary exceeds ₹21,000)
• ESI (Employer): ₹0
• TDS: ₹1,200
• Professional Tax: ₹200 (state‑specific)
• Net Pay: ₹31,650

The slip would display the company header, employee details, a table with the earnings and deductions, and a final “Net Pay” row. Below the table, you can add a note: “All statutory contributions have been remitted as per the applicable laws.”

You can download a ready‑made Excel template from AttendMitra (Free Download) and replace the sample data with your own figures. The formulas will auto‑update PF, ESI and net pay.

How NeutronX Simplifies Salary Slip Generation

NeutronX’s payroll solution is built for Indian small businesses. It stores employee PAN and bank details in encrypted form, tracks attendance, and runs monthly payroll cycles that recalculate until you finalise. The platform automatically applies the PF ceiling, ESI eligibility rules, and TDS calculations based on employee declarations.

Once the run is finalised, NeutronX generates PDF payslips that include:

• Company logo and custom colours
• All statutory deductions (PF, ESI, PT, LWF, TDS)
• Employer contribution rows
• Employee self‑service portal for downloading payslips

For a deeper look, visit the NeutronX payroll page.

Checklist Before Issuing the Slip

Use this quick checklist to ensure every slip is compliant:

• Company name, GSTIN and address are correct.
• Employee name, PAN (masked), bank account (masked) and employee ID are listed.
• Pay period (MM/YYYY) is clearly shown.
• All earnings components are itemised.
• PF is calculated on (Basic + DA) with the statutory ceiling applied.
• ESI is applied only if gross ≤ ₹21,000 and rates are correct.
• TDS is based on the employee’s declared investments; verify the latest tax slabs.
• Employer contributions for PF and ESI are displayed.
• Net Pay matches the amount transferred to the employee’s bank.
• PDF is signed or stamped as per company policy.

Running this checklist each month reduces errors and keeps you audit‑ready.

FAQ

Q: Do I need to show employer PF and ESI on the employee’s payslip?

A: Yes. The employee’s payslip must display both the employee’s and employer’s contributions for PF and ESI as per statutory requirements.

Q: What if an employee’s gross salary exceeds the ESI threshold?

A: No ESI deduction is required for that employee, and the employer does not need to contribute either. You should still note “ESI – Not Applicable” on the slip.

Q: Can I use the same salary slip template for all states?

A: The core format is the same nationwide, but professional tax and labour welfare fund rates vary by state. Adjust those rows accordingly.

Q: How often should I update the TDS calculation?

A: Review TDS annually when the employee updates investment declarations, or whenever the Income Tax slabs change.

Q: Is the NeutronX template compliant with 2026 regulations?

A: NeutronX’s payroll engine is continuously updated to reflect the latest statutory rates and compliance rules, ensuring generated slips meet current legal standards.

Ready to try it? Start free on NeutronX: billing, CRM and payroll in one place.