A certificate of earnings template is a catalogue issued by an organization to their employees which declares the net total salary received by the employee in a specified time frame. It also includes their salary before and after the tax percentage being excluded from it. This is an important document which is issued to all employees working in an organization at regular intervals, such as six or twelve months (the number or months can differ according to the needs of the company). It allows the employees to get an idea of how much they have earned in the past months and what will be the gross total of their salary after the tax reduction. Organizations use this method as a technique to keep track of how much amount from the company is being spent on the employee’s salary.
Uses of Certificate of Earnings
A certificate of earnings template is not only made by employers or business executives. Even a freelancer can find the need to have a certificate of earnings. In this case, their accountant or the person handling their finances is the one who issues them the certificate. Because even self-employed individuals need to get a clear idea of how much they have earned in the past. It is also used when an employee quits from one organization and moves to work in another one. The new organization can ask them for a certificate of earnings to see how capable the candidate was in their previous workplace and how much they used to earn. In such instances, the employee can request their previous establishment to issue a certificate of earnings for them.
Content of a Certificate of Earnings
In an organization, a certificate of earnings is usually composed in the human resource (HR) department of the company. The certificate always starts with the name of the company, their address and contact information. It can be composed on any software, such as Word or Excel. There are a few other things which are an integral part of any certificate of earnings. They are as follows:
Introduction and Objectives: in the initial paragraph of the certificate, the composer gives a brief introduction about the individual whose earnings are going to be discussed (name, position and contact information). Along with a brief introduction about the composition. Whether they are the employer, finance handler or someone else. Then they explain the objective of the issuance of this certificate.
Earnings: secondly, the composer gets straight to the point and mentions the amount of earnings the recipient/employee has made in the past few months. Let’s suppose, in six months, the total amount they have earned, the amount they have earned per month and the percentage of tax issued on their earnings. Lastly, the net total amount after the deduction of tax and other important services. Most certificate of earnings templates describe this part in a table format. Which is easier to comprehend for the recipient.
Approval: lastly, the document goes through a small procedure. Where the head of the finance department approves of the contents of the certificate and stamps it as well.
