- A payslip (salary slip) in India is the monthly statement of earnings, statutory deductions, and net pay that every employer should issue to each employee.
- Mandatory lines include basic, HRA, allowances, employee EPF (12% of basic), TDS, professional tax, and ESI where gross is ₹21,000 a month or less.
- From 2026, the Code on Wages (in force since November 21, 2025) and the Income Tax Act 2025 reshape the wage and TDS lines, and the new tax regime is the default.
Wisemonk EOR issues compliant India payslips for 300+ global companies. Talk to our experts.
A payslip in India, also called a salary slip or pay stub, is the monthly statement an employer issues to each employee showing earnings, statutory deductions, and net pay. For a foreign company running an India team, it is the document that proves payroll is being handled compliantly.
This guide covers what a compliant India payslip must contain, the legal rules that apply in 2026, how net pay is calculated, and how global employers issue accurate salary slips without a local entity.
What is a payslip in India?
A payslip is a monthly record of how an employee's salary is built and paid. It lists gross earnings, each statutory deduction, and the net amount credited to the bank. In India it serves as proof of income for the employee and evidence of statutory compliance for the employer.
It is issued every pay cycle, almost always monthly, and is commonly shared as a PDF or through an employee self-service portal.
What are the mandatory components of an India payslip?
An India payslip has two halves: earnings and deductions. Earnings include basic salary, house rent allowance (HRA), and other allowances. Deductions include the employee's EPF contribution, income tax (TDS), professional tax, and ESI where it applies. The difference between them is the net, or take-home, pay.
Here is what each part of a standard India payslip contains:
| Section | What it includes |
|---|---|
| Employer and employee details | Company name, employee name and ID, PAN, UAN (PF number), bank account, and the pay period. |
| Earnings | Basic salary, HRA, special and other allowances, and any bonus or overtime for the period. |
| Deductions | Employee EPF (12% of basic), TDS, professional tax, and ESI where gross is ₹21,000 a month or less. |
| Net pay | Gross earnings minus total deductions, the amount actually credited to the employee's bank account. |
For how each earnings component is built, see our guide on salary structure in India.
What does a payslip legally need to include in India in 2026?
India's payroll laws were consolidated in 2025. The four Labour Codes, including the Code on Wages, 2019, were notified as enforceable from November 21, 2025 and carry the wage-slip and timely-payment obligations that earlier sat in the Payment of Wages Act. Income tax withholding (TDS) follows the Income Tax Act, 2025, in force from April 1, 2026.
Labour is a concurrent subject, so both central and state rules apply. The central codes are in force, but many implementing rules are still being notified by individual states, so exact formats and thresholds can vary by state as of June 2026.
- EPF: employee and employer each contribute 12% of basic salary, administered by the EPFO.
- ESI: employees earning ₹21,000 a month or less are covered, with the employee contributing 0.75% and the employer 3.25% of wages, administered by ESIC.
- Professional tax: a state-level levy capped at ₹2,500 a year, charged by states such as Karnataka, Maharashtra, and Tamil Nadu, and not levied at all in several states.
- TDS: income tax deducted monthly under the Income Tax Act, 2025, based on the employee's projected income and chosen tax regime.
This information is for general guidance as of June 2026. Consult our team for your specific situation.
How is net salary calculated on an India payslip?
Net salary equals gross salary minus the employee's deductions( Net pay= gross salary - employee deductions). From gross pay, subtract employee EPF (12% of basic), TDS, professional tax, and ESI if it applies. The result is the take-home amount credited to the bank, usually 70% to 82% of CTC depending on structure and tax regime.
To estimate in-hand pay for any CTC, use our free India Salary Calculator, or read the full method in our guide on take-home pay in India.
How do employers create and issue payslips in India?
Creating a compliant payslip is a five-step process: collect employee and employer data, compute earnings, apply statutory deductions, generate a component-wise slip, then distribute and retain it. Most employers automate this through payroll software or a payroll partner.
- Gather employee data (name, ID, PAN, UAN, bank details) and employer details for the pay period.
- Calculate gross earnings from basic salary, HRA, and allowances.
- Apply statutory deductions: employee EPF, TDS, professional tax, and ESI where applicable.
- Generate a component-wise payslip showing earnings, deductions, and net pay.
- Distribute the slip by portal or email and retain payroll records for audits.
Prefer to hand this off? See how payroll services in India run the whole cycle for you.
What changed for India payslips in 2026?
Three changes matter for 2026 payslips. The new tax regime is now the default, with a ₹75,000 standard deduction, which changes the TDS line. The Code on Wages requires basic plus dearness allowance to be at least 50% of CTC, which lifts the EPF and gratuity lines. And the Income Tax Act, 2025 replaced the 1961 Act from April 1, 2026.
Because state rules under the codes are still being notified, employers should confirm state-specific thresholds before finalizing payslip formats for 2026.
What payslip mistakes do employers make in India?
The most common payslip errors are a basic salary set below the 50% wage-code threshold, missing UAN or ESI numbers, omitted or miscalculated statutory deductions, incorrect pay-period dates, and simply not issuing slips. Each one can create compliance exposure or employee disputes.
- Wrong basic ratio: basic below 50% of CTC now breaches the Code on Wages.
- Missing identifiers: no UAN, PF, or ESI number shown on the slip.
- Deduction errors: miscalculated TDS or skipped professional tax.
- No slip issued: failing to provide a wage slip each pay cycle.
How Wisemonk EOR handles India payslips and payroll
Wisemonk EOR runs end-to-end India payroll for 300+ global companies, generating compliant, component-wise payslips, calculating EPF, ESI, TDS, and professional tax, and filing statutory returns on time, all without you needing a local entity.
Talk to our India hiring experts to put your India team on compliant payroll and payslips.
Frequently asked questions
Is a payslip legally mandatory in India?
Yes. Under the Code on Wages, 2019, in force since November 21, 2025, employers must pay wages on time and provide a wage slip. Both central and state rules apply, and several states are still notifying their implementing rules as of June 2026.
What is a payslip called in India?
A payslip in India is also called a salary slip or pay stub. All three terms refer to the same monthly document that sets out an employee's earnings, statutory deductions, and net take-home pay for a given pay period.
What must a compliant India payslip show?
A compliant payslip shows employer and employee details, the pay period, earnings (basic, HRA, allowances), statutory deductions (employee EPF, TDS, professional tax, and ESI where applicable), and the net pay credited to the employee's bank account.
How long must employers keep payroll records in India?
Employers must retain payroll and wage records, but the exact period is set by the applicable central and state rules under the labour codes, several of which are still being notified in 2026. Most employers keep records for several years to stay audit-ready.
Do contractors get payslips in India?
No. Independent contractors raise invoices rather than receive payslips, because they are not on payroll. Only employees receive payslips. Treating a contractor like an employee can create misclassification and compliance risk for the company.
How do foreign companies issue India payslips without an entity?
Foreign companies use an Employer of Record (EOR) like Wisemonk. The EOR legally employs the worker in India, runs compliant payroll, and issues statutory payslips, so the company can hire without setting up a local entity.
Does the new tax regime change the payslip?
Yes. The new tax regime is now the default, with a ₹75,000 standard deduction, so the TDS line on most payslips reflects the new-regime slabs unless the employee opts for the old regime with eligible exemptions.
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