Salary acknowledgment Receipt

An employee who is working for an organization is entitled to a pre-decided salary for the services he renders. When the organization releases his payment, it informs him through a salary receipt, also called payslip or salary slip. In response to that, the employee has to send the organization a salary acknowledgment receipt, prepared and duly signed by him, that confirms that the employee has received his salary. This receipt is like a declaration by the employee that the payment for his services to the organizations has been obtained.

The main details included in a salary acknowledgment receipt are:

  • Date.
  • Details of the employee, including name, designation, department, etc.
  • Declaration of salary receiving.
  • Signature.

In small organizations, usually, the salary and its breakdown are given as cash in the hands of the employees and at the time of giving it, the employees are asked to sign on a paper that would prove to be evidence that they have received their payment.

On the other hand, in medium to large organizations, giving cash is not possible, so the Finance department transfers directly to the bank accounts of the employees. However, as required by law and government policies, the organizations are required to issue a document that would clearly state the breakdown of the salary that has been given to the employees.

For instance, what percentage has gone in gratuity, what part was taxed, what has been released, what is the basic salary, what are the bonuses or commissions, etc., are the components of the salary breakdown.

After receiving this breakdown or salary receipt, the employee is required to acknowledge receiving the salary through a salary acknowledgment receipt. Some organizations attach and send the salary acknowledgment receipt along with the salary slip, while others provide a template that needs to be signed by the employee every time the salary has been received.

The frequency of the salary acknowledgment receipt is dependent on the salary payment structure of organizations. For example, if an organization pays the salary twice a month, the employee would send the acknowledgment receipt twice as well and if the organization releases the payment after a month, the acknowledgment receipt would be on the monthly basis as well.

The salary acknowledgment receipts, upon receiving by the employers, are kept in the employee file for any future reference and can be used as evidence in case any issue arises in terms of the employee’s payments. As this is a signed receipt, it can be used as a lawful document.

The salary acknowledgment receipt holds the same importance as a salary receipt for the governmental organizations as well as the company itself. For the former, these receipts ensure that the company is making payments to its employees. And for the company, it makes the process of salary release and distribution smooth as well as makes the tracking of payments easy. For these benefits, these receipts are a common practice.

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