A certificate that serves as an income verification document is called a salary certificate or a salary verification letter. This is provided by an employer as evidence guaranteeing that a person is an employee of an organization and is earning dependable income.
Generally, the salary certificate formats slightly vary from one company to the other. It can vary from one country to another country based on the demands of local financial institutions as well as the law. However, overall, the salary certificate mainly includes details such as:
- Date of issue
- Personal details of employee
- Salary details
- 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
There are different policies of different companies regarding the issuance of salary certificates. Usually, companies issue one salary certificate in one financial year. However, others may issue them on a quarterly basis.
The salary certificate is issued by an authorized person in an organization and is designed on the company letterhead along with company stamp and the signature of the authorized person.
A salary certificate is different from a salary slip with the former being issued on a yearly basis while later being issued on a monthly basis.
In addition, a salary certificate is different from a salary certificate letter. The first one is not specifically addressed to any particular organization whereas a salary certificate letter is addressed to a certain organization and cannot be used for different organizations.
For instance, if an employee wants to apply for a loan and in case of rejection, wants to approach another bank, a salary certificate is useful for him than a salary certificate letter as he can use one certificate for different banks as a proof of his income and earnings.
An employee requires a salary certificate for various reasons. For instance:
- When an employee is seeking a loan or wants to do any other transaction with a financial institution
- When an employee’s spouse or a family member is seeking a loan and the financial institution requires the employee’s salary certificate as well
- 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
- When an employee needs to 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 his/her income and salary
Sometimes, an employee makes a request to his employer for a cash salary certificate to state only the cash is received by the employee and not all the other details like deductions for provident funds, etc. It is at the sole discretion of the company to accept that request or not. However, as for the general salary certificate that has all the details, it has to be issued by the company on an employee’s request as it is a right of the employee.