FAQ

Payroll

Creating Pay Head Master

A Pay Head Master may be an earning, which is to be paid to an employee, or a deduction, which is to be recovered from employee’s salary. The value of these Pay Head Masters may be either fixed or changeable based on slabs in percentage or amount and dependent pay heads.

Go to the Pay Head Master (M P P)
Pay Head Master Fields are as follows;

Field Name

Feature

Name

Type pay head name like Basic Salary, House Rent Allowance etc.

Print Name

Automatically populated same as Name. You may keep it same or may change

Pay Head Type

Earning

Use this type to create pay head of current earnings of an employee like Basic Salary, House Rent Allowance, Conveyances etc.

Deductions

Use this type to create pay head of general deductions of an employee like Canteen Charge, Other Charges etc. (In case to deduct any certain amount against any abnormal loss/theft etc you may use the Other Charges)

Employer's ESI contribution

Use this to create pay head of Employer’s ESI Contribution

Employer's PF contribution

Use this to create pay head of Employer’s PF Contribution

Loans & Advances

Use this to create pay head of Salary Advance or Loan given to Employees

Statutory Liability

Use this to create pay heads of employee’s statutory deductions like ESI, PF, Profession Tax, Income Tax etc

Display Order

In order to print pay heads in pay slip one after another you need to set diplay order number. Doing this you can define print serial number for individual pay heads of Earning site and Deduction site separately. Suppose for Basic Salary I have set 1 and for House Rent Allowance 2 then in salary slip it will print Basic Salary in serial number 1 and House Rent allowance in serial number 2. Dependent pay heads should always come after the pay heads on which they are dependent.

Affect Net Salary

Set Yes if employee's salary is to be affected by the said Pay head type else set No. In order to print the said Pay Head in pay slip you must set it Yes else set No. For all employer contribution pay heads it must be No.

Ledger Name

Press CTRL+N to create a ledger for the said Pay head. In ledger creation screen you must set Yes to "Use in Payroll" field else it will not appear in the ledger selection list in Pay Head Master. You also need to set Yes to “Cost Centre” field in order to maintain employee as a cost centre, then the cost centre will be created automatically having the name of employee and subsequently salary transactions will be made under respective cost center of the employee. While creating the earning ledgers you may choose Group "Direct Expenses". Similarly you may choose Group "Current Liabilities" for any Statutory Deduction type Pay Head ledgers.

Calculation Type

[None]

Select this if don't want to use any type of calculation

Computation

This is used where the amount of the Pay head does not depend upon any type of attendance. It is only dependent on another one or more Pay heads and is based on the slabs defined either in percentage or in amount. Example: House Rent Allowance as 40% of Basic Salary.

Flat Rate

This is used where the amount of the Pay head is fixed for a period and does not depend upon any type of attendance. E.g. Conveyance Allowance Rs. 800/- per month is exempt from income tax, fixed instalment of Loans & Advances etc.

On Attendance

This is used where the amount of the Pay head is to be calculated based on the actual days of present for a period. E.g. Basic Salary

On Production

This is used where the amount of the Pay head is to be calculated based on the production of number of units or work done in days/hours. E.g. Overtime, Extra Days etc. This is dependent on attendance.

User Defined

This is used when the value of pay head is not fixed and does not depend upon any attendance type. This allows entering the amount manually at the time of preparing salary. Example: Incentive, Canteen Charges, Advance Salary etc.

Attendance Type

Select a positive attendance type like Present, Overtime days/hours, Production Units etc. It only needs to be selected when calculation type is either “On Attendance” or “On Production” else may select [None].

Calculation Period

Days

Use this if want to calculate salary on daily basis

Fortnight

Use this if want to calculate salary fortnightly

Hrs

Use this if want to calculate salary on hour basis

Month

Use this if want to calculate salary monthly

Week

Use this if want to calculate salary weekly

Unit

Use this if want to calculate salary based on production of number of units.

Days As Per

User Defined

It is used when number of days for a month is predefined by the user irrespective of calendar days for a month.

E.g.

Employee Monthly Salary = Rs. 50000

Days As Per = User Defined

Days in Period = 30

Per Day salary for Feb (28 days) = 50000/28 = Rs.1786

Absent = 2 days

Salary Deductible = (50000/28)*2 = Rs.3571

Salary Payable = 50000 - 3571 = Rs.46429

As per Calender

It is used when number of attendance days for a month is based on calendar days falling in that month. E.g. for the month of January the attendance records will be entered for 31 days and for the month of February the attendance records will be entered for 28 days. Rest process is same as User Defined.

Days in Period

If User Defined is selected at “Days As Per” field then you may type 30 here, else leave it blank.

Calculation Formula

You may set one or more dependent pay heads here for the said Pay Head Master. E.g. for HRA you may set only Basic Salary and for Profession Tax you may set Basic Salary, HRA, Conveyance Allowance etc together. This is only required when the calculation type is “Computation” else not needed.

Method
Add	Select this to add amount of the selected Pay Head in the row
Less	Select this to less amount of the selected Pay Head in the row
Pay Head	Select a Pay Head Master

Slabs in Percentage or Amount:

Effective Date	Enter the date from which said slab will come into effect.
From Amount	Enter the amount from which said slab is to be calculated.
Upto Amount	Enter the amount up to which said slab is to be calculated.
Rate %	Enter value in percentage. In this case field “or Value” will be nil.
Or Value	Enter value in amount. In this case field “Rate%” will be nil.

Note:

Use always positive attendance (E.g. Pressent, Overtime etc) while creating a Pay Head master.
You can define one or more slabs.
It is not possible to enter “Rate%” and “or Value” together, for a single slab (row) it will take only one either “Rate%” or “or Value”.

1. In order to create employee earning pay heads please check the link given below;

Creating Earning Pay Head Masters

2. In order to create production type earning pay heads please check the link given below;

Creating production type earning Pay Head master

3. In order to create employee statutory deduction pay heads please check the link given below;

Creating Employees Statutory Deduction Pay Head Masters

4. In order to create employee general deduction pay heads please check the link given below;

Creating Pay Head Masters for employee general deductions

Pay Head Master Buttons:

Buttons in Pay Head Master are explained in Employee Master.