In this help topic you will learn how to configure Salary Setting like defining Salary Component Master, Salary Component Settings and Print Order Setting.

Salary Component Master

To compute your employees' salary, you have created all the required Salary components.

To create Salary components:

1. Click on Salary Settings menu and Select Component Master in the sub-menu.
2. In the screen that opens, enter the Component Name.

Click on Save button to save details.

Group master

You can create groups to configure different Salary structure.

To create a Group:

1. Click on Salary Settings menu and Select Group Master in the sub-menu.
2. In the screen that opens, enter the Group Name.

Click on Save button to save details.

Salary component settings

After creating the salary components, you have to define the Salary component attributes.

To set Salary component settings:

1. Click on Salary Settings menu and Select Salary Component Settings in the sub-menu.
2. In the screen that opens, select the Component.
3. Fill details such as Component type, Print name, Calculation type, default value.

You can assign a Salary component from 5 types of calculation available:

1. Fixed-Rate: The component amount will be fixed and will not affect when there is LOP for an employee.
2. Apply salary days on rate: Payroll application will calculate the value for the number of days worked in a month.
3. Monthly value entry: When component amount varies every month, this type of calculation is applied Ex: Overtime Hrs
4. Formula Based: Formula can be defined using created components, salary days, Leave types etc.
5. Apply salary days on Formula: Formula can be defined to apply LOP on the components.

Click on Save button to save details.

In the Similar way, under each group salary structure, can be defined.

Understanding 5 types of Salary Calculation in Detail

1. Fixed-Rate : The component amount will be fixed and will not affect depending on LOP for an employee.

Example:

Uniform Component: If this is the component that will be processed every month without consideration of LOP (Loss of Pay) then calculation type will be selected as Fixed Rate.

Components with the Fixed calculation type need to be configured in the Salary Configuration screen.

2. Apply salary days on rate : The component amount will be calculated for the number of days worked in a month.

Example:

Basic – If the component amount is calculated for the number of days worked in the organization, then the Apply Salary days on Rate calculation type need to use.

3. Monthly value entry : This type of calculation is applicable when the component amount varies every month.

Example:

Overtime Hrs. Component – If the component value varies month on month based on some operation like Overtime working, apply this component type. Monthly value details can be configured with manual entry/Imported in the Monthly Salary screen.

4. Formula Based : Formula can be configured for the components considering various details.

Example:

Select the calculation type as Formula Builder. Click on the FB button, in the popup double click on the components required to create a formula, similarly double click on the operators to select the required operator. If you want to define HRA as 50% of Basic and DA, Then define HRA Component as ([Basic]+[DA])*0.50

The above formula indicates HRA amount will be calculated with 50% of the Basic and DA amount

5. Apply salary days on Formula : LOP can be applied to components which are defined by formula.

Example:

Special allowance: If the component needs to be configured using the formula and LOP details, select the calculation type as Apply salary days on formula.

Define formula using by navigating to the FB button as explained in the previous step.

Print order settings

When you generate a report, you can display Components in any order.

To change the order of the components:

1. Click on Salary Settings menu and Select Print Order settings in the sub-menu.
2. Select the components under the Earnings and Deductions sections.
3. Click on the arrow buttons to change the order of components.

Click on Save button to save details.