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Salary Certificate Format: Know its Uses of Salary Certificate Research Team | Posted On Saturday, December 15,2018, 06:50 PM

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Salary Certificate Format: Know its Uses of Salary Certificate



What is salary certificate?

The salary certificate is a document issued and verified by an authorized person of an organization, on the organization letter head with the company stamp and signature to verify the document. Salary certificate is a verification document issued to employee by employer to declare employment. The salary certificate signifies the association of the employee with that company and it covers information on employee salary and employment period and salary paid for certain timeframe. It is a type of proof that validates that the employee is working in the organisation and getting paid for his duties.

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SEE ALSO: How To Calculate Your Salary?

Salary certificate format:

The image below shows the basic format of the salary certificate:

Uses of Salary certificate:

Salary certificate is an important document that shows proof that the employee works for a particular organisation and it specifies the monthly income of the employee. Salary certificate is requested for the following purposes:

  • Bank transaction
  • Tax payment
  • Applying loans
  • Applying credit card

SEE ALSO: TDS on Salary?

Elements present in the salary certificate are:

Some Companies provide entire deduction and allowances in detail in the salary certificate, whereas some companies provide the details of the total allowances that are paid to the employee. Listed below are the elements that are present in the salary certificate of an organisation:

  • Name of the employee
  • Employee code if there is any
  • Basic salary
  • Gross salary
  • Status whether temporary or permanent
  • Total allowances
  • Date of joining
  • Address
  • Cost to company
  • Designation
  • Department
  • Authority signature
  • DA dearness allowance
  • HRA house rent allowance
  • Medical allowance
  • Special allowance
  • Travel allowance
  • Provident fund deduction

SEE ALSO: Features Of Debentures

Salary certificate for bank loan:

When an individual applies for a loan, the banks or the lending institutions ask the individual to furnish some of the basic documents along with the loan application. Some of the important documents that need to be submitted for availing a loan are: address proof, identity proof, salary certificate showing all the deductions and TDS certificate – form 16. The salary certificate acts as an important document validating that the employee works in an organisation and has a fixed monthly income.

Some of the offices have restrictions on issuing salary certificate, more than once in a financial year. In such cases, photocopy of last certificate of salary, 3 months’ salary slips and TDS certificate would be the solution.

Salary Certificate Format for Bank Loan:

Salary certificate can be asked from the employer for the purpose of bank loans and it can be issued without specified format. The format of the Salary Certificate contains some necessary information related to an employees' salary break-up including the tenure. Break-up of salary certificate format shall be in the following headers:

  • Salary Certificate Format to Show Gross Pay and Allowances: Under this heading the salary certificate lists in detail, the amount of payment an employee is entitled to receive from the employer. Salary certificate shows the Gross Salary amount, which is the sum of the basic salary, HRA, DA, medical allowances and other allowances.
  • Salary Certificate Format To Show Deductions: Under this heading, the salary certificate shows all the figures that are required to be deducted from the salary, like Income Tax and other taxes to be deducted at source, loan installments or  advances repayable by the employee, employee provident fund contributions and so on.

Towards the end of the section, the salary certificate shows the sum total of all the deductions. And finally, the Salary certificate format for bank loan must have net salary to be paid to the employee, which is the Gross Salary minus the Total Deductions.

Salary certificate from employer:

Salary Certificate from the employer is a certificate under the letterhead of a particular institution, specifying the details of employment and the monthly salary and the incentives received by the employee. Salary certificate is only issued by the employer and it acts as a verification document for availing loans as it contains information on the employee’s monthly salary and employment tenure.

Salary certificate to whomsoever it may concern: given below is the basic sample of the salary certificate: 

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