What Is a Salary Slip and What Makes It Important?

What Is a Salary Slip and What Makes It Important?

Do familiar terms like take-home pay, gross pay, or tax deductions often confuse you? How do payslips work if you know it’s all on a salary slip? All those terms are typically found on a payroll slip. The pay slip is an official copy of the monthly payments covering the employees’ pay.

As it includes information on the employee’s deductions and base salary for a given month, it’s, therefore, a critical document that each employer should pay attention to. A business is required by law to periodically issue a payroll statement as evidence of salary payments made to its employees and deductions made.

Why Does a Salary Slip Matter?

As a legal employment document, a payslip is generally essential to help employees seeking loans, future employment, or government subsidies. But how does payslip work both for employers and employees? Let’s go through the details if you want to know how important it is and how it benefits them.

For employers:

  • An employee pay slip is an official confirmation that you have paid your employees and the amount you paid them. So 
  • It makes employers and employees more transparent about the amount deducted and the reasons for the deduction.
  • As an employer, you have respected your part of the agreement and paid your worker or employee. 
  • It’s also a legal document for payment claims against your employees.

For employees:

  • It confirms that you work for a company, organization, or business and earn a specific salary.
  • It can prove that you are employed, especially when applying for a new job, because you may be required to show the payroll records. 
  • You can also use it to negotiate wages in your future employment. 
  • It can prove your financial stability when you apply for a loan or mortgage.
  • You can use payroll slips as reference materials to resolve disputes regarding money claims against your employer.

What Should Be on the Salary Slip?

So, what is a payslip? The salary slip, in any form, contains several items indicating how an employee’s net salary is calculated.

Several factors affect an employee’s take-home pay, such as tax benefits, calculation methods, working time, etc. Once the calculation is complete, it is then provided to the employee via an electronic or paper slip. Here is an employee payslip example:

An example of a salary slip.

The critical elements of each pay slip are:

1. Company Name

The name of the organization responsible for employee payments must be clearly stated. With a company name, the overall content of employee payment information will be transparent.

2. Document Confidentiality

Under the company name, the document must be marked as confidential. It generally says “private and confidential,” describing that only the recipient can access the contents.

3. Payment Dates and Employee Details

This section has a payment date to specify when the business issues payroll slips to employees. Employee data should also be outlined, including employee names, sub-departmental descriptions, employee numbers, and primary taxpayer numbers (NPWP).

4. The Amount of Salary and Deductions

Finally, what is payslip for salary purposes? Here you can find what most of you, as an employee, are looking for.

The most critical information in the paysheet is the net salary resulting from the calculation, as you find it in this section. This part provides information on income, including base salary, benefits, and other incentives.

As far as it’s an essential subject, you must check on it carefully. Make sure the amount on the pay statement matches the amount of pay transferred to your bank account.


As an employer, did you go through all the details before transferring the money to your employees? Working with a third party is wise if you find it challenging to calculate your employee’s salary slip and monthly pay. At Klique, we can wholeheartedly help you keep your business payroll system running smoothly.