Salary slip formats in Bangladesh are quite simple yet detail-oriented. It includes information about the employees, their overtime hours, and deductibles. The 2006 Labor Act and 2015 Labor Rules strictly state about leaves, working hours, benefits, and pensions of employees in commercial and industrial enterprises. For this, salary slips are handy as they are formatted to break down these terms in simplistic details. These formats are quite easy to use, and you can make it easily once you know about the components to create it. Also, with an efficient HR software creating and generating accurate salary slips are faster & easier than ever.
What Is a Salary Slip?
A salary slip is actually a legal document that an employer provides employees for a specific period. Usually, it is provided per month with the entire payment breakdown. It includes working hours, leaves, allowances, benefits, and deductions.
These pay slips help the employees to understand the general payment structure and complete salary breakdown. This leaves no room for confusion among the employees. As employment proof, it ensures both parties can manage their finances accordingly.
Depending on the working system, companies provide both hard and soft copies of payment slips. However, HR and payroll software are widely used to share salary statements. This software helps employees to protect and preserve their income statements for future use.
What Are the Components of a Salary Slip in Bangladesh?
Before generating, you must know the components of the salary pay slip format in Bangladesh. It has various components ranging from employee details, earnings, deductions, and net salary. Apart from that, company contributions are important too.
Employee and Employer Details
The main component is the details of the provider and the receiver. Otherwise, the pay slip would be of no use.
The employee information includes his name, ID (if available), and designation. Along with this, the permanent account number is also a must when receiving payments.
The employer details are also provided for authenticity. Company name, address, and contact details are often provided, along with the tax account number. It makes it easy for the employees to track and store it.
Earnings
The earnings of the employee can be categorized into basic pay, HRA, DA, medical allowance, and other bonuses.
Basic Allowance
Basic allowance is the base amount that the employee gets paid without the extra allowances and deductions. This is the fixed amount; other amounts are calculated based on this. Usually, it is 40-50% of the total amount of the salary.
House Rent Allowance (HRA)
House rent allowance, commonly known as HRA, is the expense allocated for the accommodation of the employees. This amount can vary depending on the employee’s basic allowance.
The rule of thumb is to provide 50% of the basic pay as HRA. However, this can also vary based on cities. Like in Dhaka city, the HRA is calculated as 65% of the basic salary as per government laws.
Dearness Allowance (DA)
Dearness allowance is specially provided to employees in the government or public sector. This is the extra allowance provided, keeping the inflation rate into account. It’s just an added amount, 20-30% of the base salary, to reduce the impact of the high price of goods.
Conveyance Allowance
It is the cost of the transportation from home to work and vice versa. Often provided by the company as a conveyance allowance, it holds 10% of the basic salary. Companies lacking this payment often provide transportation systems, which is also a great benefit.
Medical Allowance
As the name suggests, it is an extra part of the salary provided for the medical support of the employees. The best part is the employees don’t need to provide any medical proof for this. This is the fixed amount provided monthly to the employees. For instance, in the public sector, it is 700 BDT for every official.
Other Allowance
There are other payments mentioned in the salary slip. It can include overtime payments, leave, and travel allowances. Again, employees with at least one year of service period receive festival bonuses twice a year.
Deductions
Payslips can have two basic deductions – statutory and voluntary.
Statutory Deductions
It is the mandatory deduction allocated for government benefits. This fee is required for legal compliance and must be provided by every employee. Examples of statutory deductions are –
- Income Tax: Employee income tax is calculated based on the final earnings. Depending on the tax slab the employees fall under, the employer is bound to provide that portion to the government.
- Professional Tax: Professional tax is given to the state due to their profession or employment. The tax rate can be 0 to 20% based on the annual income.
- Employee Provident Fund (EPF): This amount is paid by the employees as a savings scheme. A percentage is provided by the individual company for this purpose.
Voluntary Deductions
Voluntary deduction is often not imposed by the government. They are decided by the individual company and can vary depending on the conditions.
- Health insurance: Companies often provide health insurance by deducting a voluntary amount. A percentage of the basic salary is used for medical aid and betterment of the employees.
- Pensions: Pensions are common deductibles for salary slips in Bangladesh. This is more like a retirement salary scheme that is deducted from salary. Often, the public sectors of Bangladesh offer this.
- Maintenance or Service Fee: This is optional; many companies do not include it in their salary structure. Service fees are used to compensate for mobile bills, transportation, and internet bills.
- Unpaid Leaves: The unpaid leaves taken during the month are deducted from the salary under this segment.
Net Salary and Gross Salary
Various calculation methods are used to calculate the gross and net salary in system generated salary slips. You can use any of them if it is convenient for you. Below are some of the popular formulas which can streamline the process.
Add up the basic allowance, HRA, DA, and other allowances for gross salary.
Gross Salary = Basic Allowance + HRA + Other Allowance
However, the net salary calculation is a bit different. For that, you need to subtract the statutory deductions from the total salary.
Net Salary = (Basic Allowance + HRA + DA + Medical Allowance + Conveyance Allowance Other Allowance) – (EPF + Income Tax + Professional Tax)
Company Contributions
Company contributions are the benefits a company provides without any deductions from the salary. To put it simply, it is the overall compensation package that the company bears entirely. This is provided in different sections in the pay slip for transparency and clear breakdown.
The common examples of company contributions are –
- Premium medical insurance
- Retirement funds
- Professional development cost
- Learning and training compensation
- Provident fund
Examples of Salary Slip Formats in Bangladesh
You can create salary slips in both Word and Excel. Also, you can use the PiHR format to do that. Don’t be confused by seeing so many options; they all are the same. Let’s take a look at our editable payslip template and use it as you like.
Simple Salary Slip Format in Word
Salary Slip Format Example #1 (Microsoft Word & Google Doc Supported)
Salary Slip Format Example #2 (Microsoft Word & Google Doc Supported)
Salary Slip Format Example #3 (Microsoft Word & Google Doc Supported)
Simple Salary Slip Format in Excel
Salary Slip Format Example #1 (Microsoft Word & Google Doc Supported)
Salary Slip Format Example #2 (Microsoft Word & Google Doc Supported)
Salary Slip Format Example #3 (Microsoft Excel & Google Sheet Supported)
Salary Slip Format in PiHR
PiHR is a HR and payroll software to manage HR processes of a business. This is one of the best HR software companies in Bangladesh that automates administrative works like generating salary slips.
To create pay slips easily, PiHR presents you with an intuitive pay slip format. It provides a proper breakdown of the salary with deduction options. By following this format, the entire salary slip generation is done with a few clicks.
How to Create a Salary Slip?
Creating payment slips isn’t much hassle if you know the specifics. You can do that manually or even with the help of software.
For manual salary generation, companies usually follow the below steps.
- Keep records of the employee details (name, PAN, tax information, etc.).
- Understand the basic components of the salary slip like basic allowance, net salary, and deductibles.
- Calculate the gross salary of the employees.
- Calculate overtime and include it in the gross salary where applicable.
- Calculate the deductibles like income tax, EPF, and insurance.
- Find out the net salary using the mathematical formula.
- Format the entire slip in Word or Excel keeping the signature space.
However, the system generated salary slips are easier and more convenient. For that, you just need to –
- Choose a payroll software according to your business needs.
- Configure it and add all the company details into the system.
- Customize the salary components according to your company policies.
- Input your data for automated calculations and deductibles and generate the salary slip.
- Review and send it to employees in one touch.
Though software can ease this process by reducing calculation errors, you still need to keep your eyes open always. Update your software with the current tax trends, implement system approvals, and double-check the employee details. These simple practices can help you a lot in tackling salary slip complexities.
Why Should You Use HR Software to Prepare Salary Slips?
HR software is increasingly popular nowadays as more businesses are using it. One of the most common reasons behind using this is its simplified payroll options. According to a web document published by Business.com, 69% of users reported that the HR software system not only automates salary slips efficiently but also reduces their payroll processing time.
Along with reducing time, it also reduces calculation errors making the process simpler. Maintaining legal frameworks and tax compliance are also automatically integrated into the system. This eliminates any option for miscalculation or fines.
HR software’s detailed reporting and self-service features provide employees easy, transparent access to their salary slips. Employee data and tax information also get a double layer of security with HR software.
Final Words
Every company must provide salary slips based on local law requirements. Understanding and implementing proper salary slip formats is crucial for transparency and accurate payroll management. Providing the specific details about the employee, companies, allowance, and deductibles, you can generate a payslip easily by yourself. This not only helps them to understand the salary structure. It also helps the business have a transparent salary system to prevent misunderstandings.
It is better to use HR tools to avoid human error and generate the pay slips faster. HR software is much more efficient and can do the same work in less time. Plus, it removes the legal and compliance issues by staying updated with the local labor laws.
