Payslip Format in India: What Form V Requires

What Form V requires, in plain terms

Form V is not a government template that you must copy pixel by pixel. It is a list of content that every wage slip has to carry. The legal duty comes from section 50(3) of the Code on Wages, 2019, and the format is fixed by rule 52 of the Wages (Central) Rules, 2026. Rule 52 says the slip goes out in Form V, electronically or in physical form, on or before payment of wages. The Code itself came into force on 21 November 2025, and the Central Rules followed on 8 May 2026.

Two points matter most for an owner or HR head. First, the slip is due before or on payday, not at month end. Second, the slip has to show each item separately. A single line that says "salary: 40,000" with no split of allowances and deductions does not meet the purpose of the form, even if the total is right.

The fields, grouped the way most practitioners read them, are these:

• Establishment: name and address of the employer, and the date of issue.
• Employee identity: name, father's, mother's or spouse's name, designation, and employee code.
• Period: the wage period the slip covers, and the date of payment.
• Identifiers: the Universal Account Number (UAN) for provident fund, and the bank account number.
• Rate of wages: basic pay, dearness allowance and other allowances, each on its own line.
• Attendance basis: total attendance, or units of work done, for the wage period.
• Overtime wages, where any overtime was worked.
• Deductions: provident fund, ESI and any other deduction, each on its own line, with a total.
• Net wages: the amount actually paid after deductions.

Some commentators list HRA, gross pay and the employer's contribution as well. Those items are sensible to show, and most payroll systems print them. The safe rule is to show every earning and every deduction the employee actually has, and to make sure nothing on the slip contradicts the register behind it.

One limit is important. The Central Rules apply to establishments in the central sphere. Labour is largely a state subject, and states are still notifying their own rules. Some states keep their own forms for wage statements. If you run a state-sphere establishment, check your state's rules before you change your template.

How each figure is worked out, step by step

Start with the attendance basis, because every pay figure depends on it. Record the calendar days in the wage period, the days the employee was paid for, and the days of loss of pay. The Form V attendance line is the number of days or units the pay is based on. If the employee worked 22 of 26 working days and took no paid leave, the slip should say so, and the pay should be visibly tied to that count.

Next, settle the wage definition. Section 2(y) of the Code defines wages for the whole Code, and it is the base for several tests. Basic pay and dearness allowance, together with any retaining allowance, form the core. House rent allowance and several other items are excluded from that core, even though they still appear on the slip as earnings. The Code also expects basic pay and dearness allowance together to make up at least half of total remuneration. That is the 50 per cent test. If your structure fails it, the wage base used for other calculations will rise, and you need to fix the structure before running payroll.

Then calculate the earnings. Work out each allowance at its contract amount, adjust for attendance using the method in your appointment letter or policy, and add any overtime. Overtime is shown separately. It is not folded into basic pay.

Next, the provident fund (PF) deduction. The employee's share is 12 per cent of the PF wage, which is basic pay plus dearness allowance, subject to the statutory wage ceiling. The ceiling is the part that has changed recently. Several payroll and compliance firms report that the ceiling rose from 15,000 to 25,000 rupees a month with effect from 17 September 2026, under Ministry of Labour and Employment notification S.O. 5109(E). Another source published in 2026 still describes 15,000 as the ceiling in force. Before you run October 2026 payroll, check the current notification on the EPFO website, because the answer changes the PF figure for every employee above 15,000 in PF wages.

Then ESI, where it applies. The ESI wage limit is 21,000 rupees of gross pay a month, or 25,000 for employees with a disability. That limit is based on gross pay, not basic pay. One secondary source reports the employee share at 0.75 per cent and the employer share at 3.25 per cent, with the deposit due by the 15th of the following month. Check these rates against the ESIC site before you rely on them, because the text of the scheme and the figures should come from the official source.

Then professional tax, TDS and any other deduction. Professional tax is set by each state, so the schedule for your state is the only correct input. Income tax deducted at source (TDS) depends on each employee's tax position and the declarations they have filed. These amounts are not fixed by Form V, but they must appear as separate lines when they are deducted.

Finally, net pay. Net pay is gross earnings minus total deductions. Print the total deductions, then the net amount, then the mode of payment and the bank account reference, which is what Form V expects you to show.

A worked example with real numbers

Take a clerk with a monthly basic pay of 12,000 rupees, a house rent allowance of 6,000 rupees and a special allowance of 4,000 rupees. There is no dearness allowance and no overtime in this month. The wage period is October 2026, and the employee worked the full 26 working days. Gross earnings are 22,000 rupees.

The basic pay of 12,000 is 55 per cent of total pay, so it passes the 50 per cent test. The PF wage is the basic pay of 12,000, which sits below both the old 15,000 ceiling and the 25,000 ceiling. The employee's PF share is therefore 1,440 rupees under either reading. That is why this example is a useful one to start with. Once the basic pay goes above 15,000, the two readings give different answers.

ESI does not apply here. Gross pay of 22,000 is above the 21,000 limit, so no ESI line is needed. Professional tax and TDS would be added from the state schedule and the employee's tax position, and are left out of this example because they depend on those inputs.

The slip also needs the UAN, the bank account reference, the payment date and the wage period. If the payment goes out on 7 November 2026 for October wages, the slip must be ready on or before that date. Issuing it a week later is late, even if every figure is right.

Cases that change the answer

Several situations move the figures or the timing, and this is where most of the errors happen.

Resignation and exit. Final pay follows its own clock. Under the Code's timing rules as summarised by the Ministry of Labour and Employment, wages on termination or resignation must be paid within two working days. A final slip still has to be in Form V. Any notice-period recovery or recovery of an advance must be shown as a deduction, and it must stay within the cap described below.

Contract and fixed-term staff. The slip format does not change for fixed-term or contract employees. What changes is the wage rate and the period. If a contractor's workers are paid through a principal employer, the principal employer carries accountability under the new rules, so the slip should be checked against the contractor's payroll records.

Minimum service and eligibility. Some amounts on a slip depend on service. Gratuity, for example, is not a monthly deduction, and it is not shown in the monthly Form V figures. It belongs in the final settlement and in the statement that accompanies it. Check how your leave encashment and bonus are paid, because bonus and some allowances are excluded from the wage definition for certain tests.

Caps on deductions. Section 18(3) of the Code says that total deductions from wages in any wage period must not exceed 50 per cent of those wages. Recovery of any excess follows a method set out in the rules. The cap matters most when an employee has an advance, a loan recovery, damage recovery and loss-of-pay deduction in the same month. If you have to stop a deduction at the cap, the slip must show what was deducted, and the balance must be recovered in the manner the rules allow, not quietly dropped.

Exclusions. Some items are excluded from wages, such as certain allowances and employer contributions to pension or provident funds. Those items are excluded from the wage base for the 50 per cent test and from some calculations. They can still appear on the slip for information, but they must not be mixed into the basic figure used for statutory purposes.

Disabled employees and ESI. The ESI ceiling is 25,000 rupees for an employee with a disability, against 21,000 for everyone else. Confirm the status with the employee's certificate on file before you apply the higher limit.

Common mistakes

The first mistake is treating the slip as a summary. Form V asks for the rate, the attendance and each deduction. A slip that only shows net pay fails the form, and it also fails the reader who wants to check the figure.

The second mistake is using last year's template. Many templates online were built before the Central Rules existed. They often show a PF cap of 15,000 without any date, or use an ESI rate that was set years ago. Check every constant in the template against the current notification.

The third mistake is issuing the slip after payday. The obligation is tied to payment. A correct slip sent one week after salary has been credited is still a late slip.

The fourth mistake is hiding deductions inside a net figure. Each deduction needs its own line, so that the employee can see what was taken and why.

The fifth mistake is ignoring the 50 per cent cap on deductions. Stacking a loan recovery, a damage recovery and an absence deduction in one month can push the total over the limit without anyone noticing.

The sixth mistake is treating the slip as the only record. Registers, attendance records and the deduction ledger must agree with the slip. An auditor or inspector will compare them.

What to check with HR or a lawyer

Some questions cannot be settled by reading a guide. Take these to your HR lead, payroll adviser or a labour lawyer before you change a template or a salary structure.

1. Which rules apply to your establishment: the Central Rules, or the rules of the state where the unit is located?
2. What is the current PF wage ceiling in the EPFO notification you are following, and is the change applied from the right date for September wages?
3. Does your salary structure pass the 50 per cent basic test, and how is the wage definition applied to each allowance?
4. How do you handle loss of pay, and does your written policy set the divisor for converting monthly pay into a daily rate?
5. How much of a final settlement is paid in the two-working-day window, and what sits in a later statement?
6. Do any deductions need the employee's written consent, and is each one within the cap?

Keep a record of the answers. A short written note from your adviser on the PF ceiling and the state position will save time at the next inspection.

How employers take routine payroll and HR work off their staff

Monthly wage slips are a good example of work that repeats the same steps every pay cycle. Someone pulls attendance, applies the same allowance rules, checks the PF and ESI limits, and then types the same lines into a template. AiStaffo builds AI workers that take on this kind of routine work. In a setup like this, an AI worker reads the attendance export, calculates each Form V line from the agreed salary rules, flags any employee who crosses a ceiling or the 50 per cent deduction cap, and drafts the slips for review. The payroll or HR lead still approves the run, handles exceptions, and answers employee questions. To see how this would fit your own payroll, book a free automation audit.