Payroll Setup
Go to: HR → Setup → Payroll Setup
Payroll Setup creates the building blocks of pay. Operational payroll (assignments, payroll entry, salary slips) is under Payroll & Salaries.
1. Salary Component
Go to: HR → Setup → Payroll Setup → Salary Component
A Salary Component is one line on a payslip — Basic, HRA, Medical, Provident Fund, Income Tax, and so on.
| Field | What it means |
|---|---|
| Name / Abbreviation | Full name and short code on slips |
| Type | Earning or Deduction |
| Amount Type | Fixed, Percentage, or Per-hour based |
| Calculation Basis | Working days, overtime, short hours, monthly, one-time |
| Taxable | Whether included in tax calculation |
| Pay against Benefit Claim | Claimable benefit earning (with yearly max / pro-rate options) |
| Account | Ledger account for accounting posts |
Status: Draft → Approved → Cancel
Benefit Claims apply to earnings only. Benefit claims later pay against that flexible component.
2. Salary Structure
Go to: HR → Setup → Payroll Setup → Salary Structure
A Salary Structure is a named pay package: which components apply, and how often payroll runs for that package.
| Field | What it means |
|---|---|
| Name | e.g. Staff Monthly, Worker Monthly |
| Payroll Frequency | How often this structure is paid |
| Salary Details | Component lines with amount, %, or formula |
Status: Draft → Approved → Cancelled
Employees are not paid from the structure alone — you must later create a Salary Structure Assignment with a base salary.
3. Income Tax Slab
Go to: HR → Setup → Payroll Setup → Income Tax Slab
Income Tax Slabs define tax brackets used when calculating payroll tax.
| Field | What it means |
|---|---|
| Name | e.g. Standard Tax Slab 2026 |
| Is Default | Default slab when assignment does not override |
| Brackets | Min/Max income, rate %, fixed tax, sort order |
Status: Draft → Approved → Inactive
Bracket ranges must not overlap. On an employee’s salary structure assignment you can pick a slab or bypass tax slab calculation when required.
After Payroll Setup
Continue in Payroll & Salaries:
- Assign salary structures to employees (single or bulk)
- Create a Payroll Entry for the period
- Generate, approve, and pay salary slips
- Use Additional Salary, Benefit Claims, or Retention Bonus when needed