Primer. Hold on to that payslip

We all eagerly await our payslips every month along with our salaries, but how many of us actually hold on to this document?

A payslip is more than a simple statement of the amount that was credited to your bank account in a month. It makes good sense to retain payslips for a period of a few years, as they can come in handy in a variety of situations. Here’s more.

Proof of income Your salary slip contains essential information such as net pay, taxes and deductions. That is perhaps the first reason to maintain a file of all your old payslips. There is always the danger of the taxman asking for details anytime, either for the financial year or earlier periods; so it’s best to keep a record of your income.

It certainly isn’t possible for you to remember salary details of previous years. Your payslip can help you clear the air as it outlines how much your income was during a year and how much tax was deducted at source. In that respect, maintain a file of returns for a couple of years, or even longer if possible.

If you receive physical statements, scanning and storing the payslips on your computer or in cloud storage can help eliminate clutter.

Keeping track of your pension fund contributions is an equally good reason to hang on to your salary slip. This is especially true if your company has not been depositing your PF contribution, even though it has been making deductions, or there is some discrepancy in your corpus.

Reinforcing your capability Apart from standing as proof of income and other contributions, payslips are often demanded in certain situations such as when you apply for a loan.

In some cases, you may even be asked for several months’ payslips to verify if you have the capacity to service the amount you are borrowing. It serves to affirm whether you are gainfully employed with a company or a contract employee or a self-occupied professional, the sustainability of your income and your repayment capability.

Another situation when a payslip comes in handy is when you are applying for a job. A company may want to know how much you are drawing at your current workplace, the various benefits and perks you earn, before they make an offer. In order to ensure that you weren’t fibbing, they’re well within their rights to ask for your payslip copy.

If you’re planning to travel abroad on work or holiday, you may be asked for your payslip. Some countries require proof of salary or employment for visa applications.