129 lines
5.2 KiB
Markdown
129 lines
5.2 KiB
Markdown
# Salary And Payroll
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Salary is a fixed amount of money or compensation paid to an employee by an employer in return for the work performed .
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Payroll is the administration of financial records of employees' salaries, wages, bonuses, net pay, and deductions.
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To process Payroll in ERPNext,
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1. Create Salary Structures for all Employees.
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2. Generate Salary Slips via [Payroll Entry](/docs/user/manual/en/human-resources/payroll-entry.html).
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3. Book the Salary in your Accounts.
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### Salary Structure
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The Salary Structure represents how Salaries are calculated based on Earnings
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and Deductions.
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Salary structures are used to help organizations:
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1. Maintain pay levels that are competitive with the external labor market,
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2. Maintain internal pay relationships among jobs,
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3. Recognize and reward differences in the level of responsibility, skill, and performance, and manage pay expenditures.
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The usual components of the salary structure (in India) include:
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__Basic Salary:__ It is the taxable base income and generally not more than 40% of CTC.
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__House Rent Allowance:__ The HRA constitutes 40 to 50% of the basic salary.
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__Special Allowances:__ Makes up for the remainder part of the salary, mostly smaller than the basic salary which is completely taxable.
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__Leave Travel Allowance:__ The non-taxable amount paid by the employer to the employee for vacation/trips with family within India.
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__Gratuity:__ It is basically a lump sum amount paid by the employer when the employee resigns from the organization or retires.
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__PF:__ Fund collected during emergency or old age. 12% of the basic salary is automatically deducted and goes to the employee provident fund.
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__Medical Allowance:__ The employer pays the employee for the medical expenditures incurred. It is tax-free up to Rs.15,000.
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__Bonus:__ Taxable part of the CTC, usually a once a year lump sum amount, given to the employee based on the individual’s as well as the organizational performance for the year.
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__Employee Stock Options:__ ESOPS are Free/discounted shares given by the company to the employees. This is done to primarily increase employee retention.
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To create a new Salary Structure go to:
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> Human Resources > Setup > Salary Structure > New Salary Structure
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#### Figure 1.1:Salary Structure
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<img class="screenshot" alt="Salary Structure" src="/docs/assets/img/human-resources/salary-structure.png">
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### In the Salary Structure,
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* Select the Employees and enter Base (which is base salary or CTC) and Variable (if applicable)
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* Set the starting date from which this is valid (Note: There can only be one Salary Structure that can be “Active” for an Employee during any period)
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#### Figure 1.2:Salary Structure for Salary Slip based on Timesheet
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<img class="screenshot" alt="Salary Structure" src="/docs/assets/img/human-resources/salary-timesheet.png">
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### Salary Slip Based on Timesheet
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Salary Slip based on Timesheet is applicable if you have timesheet based payroll system
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* Check "Salary Slip Based on Timesheet"
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* Select the salary component and enter Hour Rate (Note: This salary component gets added to earnings in Salary Slip)
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### Earnings and Deductions in Salary Structure
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In the “Earnings” and “Deductions” tables, you can calculate the values of Salary Components based on,
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* Condition and Formula
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#### Figure 1.3:Condition and Formula
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<img class="screenshot" alt="Salary Structure" src="/docs/assets/img/human-resources/condition-formula.png">
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* Condition and Amount
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#### Figure 1.4:Condition and Amount
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<img class="screenshot" alt="Salary Structure" src="/docs/assets/img/human-resources/condition-amount.png">
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* Only Formula
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* Only Amount
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#### Figure 1.5:Account Details
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<img class="screenshot" alt="Salary Structure" src="/docs/assets/img/human-resources/salary-structure-account.png">
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* Select Mode of Payment and Payment Account for the Salary Slips which will be generated using this Salary Structure
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Save the Salary Structure.
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In conditions and formulas,
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* Use field "base" for using base salary of the Employee
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* Use Salary Component abbreviations. For example: BS for Basic Salary
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* Use field name for employee details. For example: Employment Type for employment_type
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### Leave Without Pay (LWP)
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Leave Without Pay (LWP) happens when an Employee runs out of allocated leaves
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or takes a leave without an approval (via Leave Application). If you want
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ERPNext to automatically deduct salary in case of LWP, then you must check on
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the “Apply LWP” column in the Earning Type and Deduction Type masters. The
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amount of pay cut is the proportion of LWP days divided by the total working
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days for the month (based on the Holiday List).
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If you don’t want ERPNext to manage LWP, just don’t click on LWP in any of the
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Earning Types and Deduction Types.
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* * *
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### Creating Salary Slips
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Once the Salary Structure is created, you can make a salary slip from the same
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form or you can process your payroll for the month using Payroll Entry.
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To create a new Salary Slip go to:
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> Human Resources > Setup > Salary Slip > New Salary Slip
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#### Figure 2: Salary Slip
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<img class="screenshot" alt="Salary Slip" src="/docs/assets/img/human-resources/salary-slip.png">
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