A salary certificate is issued by an employer to an employee upon request for validation of the employee’s income, and the duration of his/her employment. The certificate is often required by an employee at the time of processing for bank’s operations (transactions or requesting for loan and credit card), traveling abroad, or upon transition to another organization.
It serves as proof of the employee’s financial status and association with the employer and could be utilized to provide an account of the employee’s steady income.
A salary certificate unlike a salary slip (also referred to as a payslip or paystub) mentions not only the details of the employee’s salary and deductions made for tax or additional employee benefits but also provides the details of the employee’s employment duration. It is in conformity with the contractual agreement of the employee and is only issued when an employee or a financial institution puts forward a request for it.
Whereas, a salary slip highlights the details of the salary the employee gets accredited with for a particular month. Most employers roll out the slips each month to the employees, to provide a record of salary transfer.
A salary certificate could be issued in various formats, as discussed below:
Basic (Certificate Layout)
It is a type of salary certificate that does not mention the breakdown of income and deductions. It only includes the total salary (monthly or annual) which is paid to the employee and rarely mentions the total deductions. Also, it does not address the usability or the reasoning for which it is issued.
The format of such a certificate is similar to those awarded as recognition of particular achievement and the certificate includes:
- Employer’s Logo (aligned as per the Employer’s branding guidelines)
- Employer’s Name
- Certificate Header – in the case of salary certificate the header is Salary Certificate
- Recognition line or Certification line – the words such as ‘this is to certify’ are used and the line is followed up by the employee’s name
- Employee’s Name – it is written below the recognition line
- Net Salary
- Employment duration
- Deductions (if any- may or may not be included)
- Names and Signatures of relevant authorities
*Font for the certificate is used as per the Employer’s branding guidelines
Sample
<Insert logo here and Employer’s Name>
SALARY CERTIFICATE
this is to certify that
<Employee’s Name>
has been employed with <Employer’s name> as a <Employee’s designation> since <date>. He/she earns $[X] as his/her annual income, deducting $[X] worth of income tax.
______________________ _____________________
<Name> <Name>
Chief Financial Officer Senior Officer – Finance
Basic (Letter- Layout) – It covers the same components as mentioned for the certificate layout, but it is formatted in the form of a letter and also states a reason, the certificate is requested.
Sample
[Date]
To whom it may concern
This is to certify that <Employee’s Name> has been employed with <Employer’s name> as a <Employee’s designation> since <date>. He/she earns $[X] as his/her annual income, deducting $[X] worth of income tax.
The certificate can be used for loan and visa applications.
Sincerely,
ABC
File: Word (.docx) 2007+ and iPad
Size 42 Kb | Download
Comprehensive
This category of salary certificate mentions all the required details and is formatted as a letter template. The details of earnings, deductions, employment status, and duration are written on official letterhead and duly signed and stamped by the relevant authorities. The certificate also mentions the reason for which it could be used. The essentials mentioned in this category of the certificate include:
- Employer’s Logo (aligned as per the Employer’s branding guidelines)
- Employer’s Name
- Certificate Header – in the case of salary certificate the header is Salary Certificate
- Employee’s Name – it is written below the recognition line
- Employment status and duration
- Financial breakdown of earnings and deductions – monthly or annual as per the requirement of the certificate. The units of financial figures are defined as per the requirement, and the amount is converted to the currency accordingly
- Employer’s credentials
Sample
[Employer’s Logo and Name]
Salary Certificate
- Employee’s Name: _________________________________________
- Employee’s Designation: ___________________________________
- Employment duration: _____________________________________
- Date of Joining: ____________________________________________
- Date of Contract Termination: ______________________________
- Employment Status: Permanent [ ] Temporary [ ] Fixed Contract [ ]
- Salary certificate issued for: _________________________________
- Financial Details
| EARNING | AMOUNT | DEDUCTIONS | AMOUNT |
| BASIC PAY | $[amount] | A | $[amount] |
| HOUSE RENT | $[amount] | B | $[amount] |
| UTILITY | $[amount] | C | $[amount] |
| VACATIONS | $[amount] | C | $[amount] |
| STAT HOL | $[amount] | ||
| TOTAL GROSS | $[amount] | TOTAL DEDUCTIONS | $[amount] |
| NET PAY | $[amount] |
Signature of Issuing Authority: _________________________________
Name of Issuing Authority: ____________________________________
Company’s Name: ___________________________________________
Company’s Address: __________________________________________
Company’s Contact Details: _________________________________
Company’s seal or stamp
File: Word (.docx) 2007+ and iPad
Size 42 Kb | Download
As evident from the above samples, the comprehensive category is more structured and covers all essentials without leaving any ambiguity for the reader. It also covers all fundamental essentials and can be customized as per the requirement of a financial institution, embassy, or potential employer.
Salary Certificate Formats for Multiple Countries
The specifics mentioned in the certificate may vary for different countries, as per the country’s Employment Laws, Country’s Constitution, or Payroll Legislation. The essentials of a few countries are highlighted below:
India – besides mentioning the employment duration, basic pay, house rent, and utility, the certificate also gives an account of deductions such as:
- income tax deductions at source (TDS);
- professional tax – in conformity with the Constitution of India, Article 276, Clause 2, is levied on the person practicing any profession, and is receiving a threshold income as defined by the Constitution;
- and any other deductions (insurance, health, etc.)
Canada – The employees in Canada are issued pay stubs (payslips), for each month. It is common practice to submit paystubs as proof of employment or salary verification. The employees can request a salary certificate, which mentions not only the earnings, but also deductions for federal tax, employment insurance, group term insurance, and any other applicable deductions.
United Kingdom – the certificate covers all basic essentials as mentioned in the comprehensive format, along with the deductions for National Insurance, as a part of the state’s legislation, and is an integral component of the employee’s salary for the provision of social security by the state.
Making a Request for Salary Certificate
A salary certificate request letter is written by the employee to the employer for the purpose of receiving a salary certificate.
The request letter specifies the reason for which the employee requires the certificate and also mentions the details that are to be added in the letter.
The reason for the request letter could be an application for a bank loan, income tax return, visa application, or the requirement of a potential employer.
The request letter is a good way to document the request in the employee’s personal file of Human Resources.
Hence, a salary request letter is a correspondence between the employee and the employer, while the salary certificate is a validation and attestation of the employee’s employment and financial status used by the employee for submission to an external institution or company (bank, embassy, or potential employer).
In order to receive a salary certificate, the employee needs to put up a request for it, by means of a request letter. While writing a request letter, the following things are considered:
- Concise and clear – the body of the letter should be kept concise and clear and unnecessary details should be avoided
- Reason for Request -the letter should highlight the reason for which the certificate is required. The reason could be any of the above mentioned
- Required details – the letter should also specify the details which are required in the certificate such as employment duration, tax deductions, and basic pay or any other required information
- Deadline – the letter must incorporate a deadline (if any) for issuance of the salary certificate. The applications process for banks and embassies is time-bound, therefore, the deadline needs to be clearly mentioned
Sample Salary Certificate Request Letter
[Date]
[Recipient’s Name]
[Designation]
[Company’s Name]
[Address]
Dear Mr./Ms.,
I, [Name], have been working as [Designation], at [Company’s Name] for the past three years. I am writing to request a salary certificate mentioning my employment duration, basic pay, and tax deductions.
The certificate is required to complete my Visa application process for Canada, which would serve as proof of my bank’s statement and steady income.
I would appreciate it if the certificate is issued by [date].
Looking forward to your cooperation.
Sincerely,
File: Word (.docx) 2007+ and iPad
Size 37 Kb | Download
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