To create a new item from scratch, press the button “New”. This will take you to the following screen:
To create new item, add details here. Once you have updated / added the details, press “submit” button to save the item.
Description of the fields form the screen above:
Name: Give a name here to identify the item for component group
Code: Create a unique identify code for the salary item here. This will represent the item selected in Type below. For example, “HRA” for House Rent Allowance, “BASIC” for Basic Salary etc.
Type: Choose any one type of salary items from the following:
- Earnings: Salary payable to the employee and forms part of CTC. For e.g., Basic Salary, DA etc.
- Deductions: These are the items deductible from employee’s salary. These deductions don’t cover TDS, Provident Fund, Professional Tax or ESI.
- Statutory: Select this to add statutory deductions, such as PF, TDS, Provident Fund, Professional Tax or ESI etc.
- OverTime: Select this to mark item as overtime. This is a taxable item.
- Reimbursement: This is neither an earning nor a deduction. This covers the expenses or costs spent by the employee on behalf of the organization while performing work. This is not “Taxable”, therefore, tick tax and CTC related boxes carefully.
Deduction Type: You will see this section when you have selected deduction in the component type. This is mandatory to fill to define the type of deduction.
Statutory Type: This will populate if you have selected component type “Statutory”. Check one of the boxes to define the statutory deduction type.
Overtime Based on: This show only when you have selected overtime in the component type. The options are “Hourly based” or “Shift Base”. Choose one option to define overtime calculation.
Paid Component (Show on Payslip): Check the box to show this component item in the employee payslip. If you don’t want this item to show on payslip, uncheck the box.
Taxable: Normally, this box is ticked by default. You can check or uncheck this to include or exclude the item amount from tax calculation.
Attendance Dependent: If this is selected, the component amount will be calculated on the basis of number of days worked by employee.
Ex. Amount 1200.00
–Days in Month = 30
–Loss Pay Days = 2
–Net Amount would be 1200.00 / 30 * (30 – 2) = 1120.00
–80.00 will be Loss of Pay for that period
Part Of CTC: If this is selected, then the component amount will be considered as CTC amount while calculating monthly salary.
Enable: Check the box to mark this item active. If not checked this will be ignore at the time of calculating monthly salary.
Deduct Before Tax Calculation: Check this box if the deduction should not be included in taxable Income.
Adjust Balance Amount to this Item: If you check this box, the balance after calculation of all other items will show in this item.
Recurring / One Time: To show this item on monthly payslip, check this box. If you want to use the items as one of item on the payslip, uncheck this box.
Calculation Type: This can be fixed or based on a formula.
Value Formula: Keep this “0” if you have selected fixed option. In this case you can enter amount at the time creating payslip for employee.
If you have selected “Formula” option, define the formula here. For e.g., “{{BASIC}} * 50 / 100” means this item will be 50% of BASIC item. The values will be calculated automatically on the bases of formula defined.
Minimum Amount and Maximum Amount: Fill these fields to define the range of value to put limit on the amount for this item.
Pro rata: Check the box, when an employee has joined or left in the middle of the month.
Once values are added and selections are made, press the button “submit” to save component item.
