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Getting Started

By the end, you’ll be able to:

  • View all existing salary components
  • Create and configure new components
  • Edit or update existing ones
  • Manage earnings, deductions, and formulas
  • Apply rules to employees or departments
  • Generate component usage reports

Prerequisites

To manage salary components, you’ll need:

  • HR Admin Access – Permission to create/edit payroll components
  • Payroll Knowledge – Understanding of salary structure and compliance
  • Component Details – Clear info about the component you’re adding
  • Calculation Rules – Whether it’s fixed, percentage-based, or formula-driven

Types of Salary Components

  • Earnings – Add to employee salary (e.g., Basic, HRA, Bonus)
  • Deductions – Reduce salary (e.g., PF, ESI, TDS)
  • Fixed – A fixed amount (e.g., ₹500 transport allowance)
  • Variable – A percentage of salary (e.g., 10% HRA)
  • Formula-based – Calculated using custom rules

Accessing Salary Components

  • Go to Payroll → from the main menu
  • Select Salary Components → under Payroll submenu
  • Browse List → view all existing earnings and deductions
  • Use Tools → filter, search, or take actions (edit, delete, configure)

Tip: Use the search bar if you have a long list of components.

Creating a New Component

  1. Click Add Component
  2. Fill in Component Details:
    • Name, Code, Type (Earning/Deduction), and Category
    • Description (optional but recommended)
  3. Configure Calculation Settings:
    • Fixed Amount – Enter default value
    • Percentage – Select base component (e.g., Basic Salary)
    • Formula – Write or paste a calculation formula
  4. (Optional) Add Applicability Rules:
    • Apply to employee groups, departments, designations, or salary ranges
  5. Set Display Preferences:
    • Show in payslip, reports, and order on printed documents
  6. Click Save

Your new component is now active and ready for payroll processing.

Editing an Existing Component

  • Search or filter the component list
  • Open the component and click Edit
  • Update fields like Name, Description, Default Value, or Formula
  • Review & Save changes

Warning: Changes to active components will affect payroll and reports immediately. Always review before saving.

Common Component Categories

Earnings – Basic, DA, HRA, Medical Allowance, Overtime, Bonus, Incentives
Deductions – PF, ESI, Professional Tax, TDS, Loan Deductions, Insurance

Advanced Configuration

  • Fixed Amount – Set value, currency, and effective date
  • Percentage-based – Define percentage, base component, and rounding rules
  • Formula-based – Write custom formulas, test syntax, add conditions

Always test your formula before applying it to employees.

Reports & Analysis

  • Component Summary – Total, active, earning vs deduction
  • Usage Reports – Which employees, departments, or salary ranges use it
  • Cost Analysis – Financial impact of components

Troubleshooting

  • Component not calculating? → Re-check formula syntax & variables
  • Duplicate name error? → Use unique names/codes
  • Validation failed? → Ensure required fields and value ranges are correct

Best Practices

  • Use clear, descriptive names (e.g., “Transport Allowance – Fixed”)
  • Keep consistent codes and categories
  • Document complex formulas
  • Review and update components periodically
  • Backup before major changes