A salary certificate or salary verification letter is an income verification document that an employer provides as evidence that a person is an employee of an organization and is earning dependable income.
Generally, the salary certificate formats vary slightly from one company to the other. It can vary from country to country based on local financial institutions’ demands and the law. However, overall, the salary certificate mainly includes details such as:
- Date of issue
- Personal details of employee
- Position/designation
- Salary details
- Allowances
- Bonuses or other payments
- Salary deductions for provident funds
- Other deductions
- Any forced savings
- Net salary
- Tenure of employment
- Details of the authorized person and organization
Different companies have different policies regarding the issuance of salary certificates. Usually, companies issue one salary certificate in one financial year. However, others may issue them every quarter.
The salary certificate is issued by an authorized person in an organization and is designed on company letterhead with the company stamp and the authorized person’s signature.
A salary certificate differs from a salary slip issued yearly and monthly.
In addition, a salary certificate is different from a salary verification letter. The former is not explicitly addressed to any particular organization; the latter is addressed to a specific organization and cannot be used for different organizations.
For instance, if an employee wants to apply for a loan and wants to approach another bank in case of rejection, a salary certificate is more beneficial than a salary certificate letter as he can use one certificate from different banks as proof of his income and earnings.
An employee requires a salary certificate for various reasons. For instance:
- When an employee seeks a loan or wants to do any other transaction with a financial institution.
- When an employee’s spouse or a family member seeks a loan, the financial institution also requires the employee’s salary certificate.
- When an employee wants to apply for a visa or immigration.
- When an employee wants to sponsor someone.
- When an employee is going for higher studies or getting a child admitted to a school.
- An employee must show the basic salary and salary deductions for tax purposes.
- When an employee is seeking a new job.
- When an employee wants to keep a record of their income and salary.
Sometimes, an employee requests his employer issue a cash salary certificate that states only the cash received by the employee and not all the other details, like deductions for provident funds, etc. It is at the company’s sole discretion whether or not to accept that request. However, the company has to issue the general salary certificate with all the details at an employee’s request, as it is the employee’s right.
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