My Payroll Master HRM software makes setting up salary structure for each employee easier than ever. This video explains the simple, step-by-step process of setting up the salary structure. Watch on.
In this video we can focus on how to configure Salary Structure in My Payroll Master. Salary structure is the details of salary being offered to an employee in terms of breakup of different components constituting the compensation, which determines in hand pay, gross salary, net salary, allowances etc. With My Payroll Master, you can create salary structure according to labour laws.
To set up salary structure, go to Company Set up and click on Salary Structure.
Go to structure names and click the New button ->First enter the Structure Name
Then enter Structure Defined- either monthly or daily -> Next is Calculation Method. Choosecalendar, working days or fixed days
Select any of them
► Calendar day calculation means total days in a month are considered for salary calculation. For example, if an employee's monthly salary is Rs 10000, the salary calculation is 10000 divided by the monthly days into total monthly days, excluding loss of pay. Method explanation will come automatically when you select Calculation Method.
► Next calculation Method is Working Days. Working Days calculation depends on shift policy. Working day calculation is gross salary divided by working days multiplied by the present day.
► Next calculation method is fixed days. It is calculated 30 days per month.
Next enter monthly gross salary. If Monthly Gross Salary is entered 10000, and if an employee is having below this gross salary, it won't come under this structure. When you are entering Monthly Gross Salary, the Remaining amount for applied formula will appear.
Next is Structure Defined Daily. In this, the only difference is that here we are entering Daily amount.
Next is Heads for Monthly Earnings. That means fixing heads for monthly earnings is the base for employee's wages. Whatever heads we are choosing will reflect on employee salary details.
Salary components needed for the company can be created in salary head menu. Two options are there, to apply heads for monthly earnings. Formula and Limit.
►If you select Formula, for example, if you are entering 50 percentage of gross salary in basic, click on the corresponding tab. Then give Monthly Gross Salary X .5. This is according to Company Policy.
►If you want to see all the equation that you have entered, drag the tab.
► If you have entered the formula wrong, please click on Clear All.Then re-enter the formula and click OK button.
►Next is Limit. Limit is given to keep maximum desellers to the employees for the recommended wage.That means limit is given to fix maximum wage for the employee. Enter limit value. Then click OK. The value will be shown against Basic-(limit).
► Next is apply formula. Whatever limit value you are giving will be shown here. In Limit settings two options are there—Whichever is lesser and Whichever is greater.
When you are choosing Whichever is lesser the employee will get the wage only till that limit value. Next is Whichever is greater. When you are choosing this option, the greater value will be taken for Salary Component, ie.either limit value or formula value.
Balance salary amount can be divided to other components like HRA, DA etc. For example, for HRA, we give 30 percent. The remaining amount for the applied formula is 5000. When you are choosing the last component, give Remaining Balance.Now the Remaining Amount for the applied formula will be shown as zero. If there is more than one component, you must apply remaining balance as the last component. If there is only one component in the structure, select monthly gross salary only.
Next is Heads for Annual Earnings. In this part also, the components needed for the company can be created in Salary Heads menu.
► Four options are there in this to apply for annual earning—formula, fixed, manually and limit.
► For formula and limit, we are applying same as in the heads for monthly earning.
►Next is fixed.Enter fixed value. This value will be fixed for the component and it will reflect in salary. When you are entering fixed value, a check box will come. It means the amount will be active for the component. When you uncheck, it will be inactive.
► Next is manually. If you are selecting manually, you can upload variable amounts to the employee according to their salary.
Next is Heads for Benefits. In My Payroll Master, Heads for Benefits is fixed as the amount paid by the employer to their employees. That means cost to the company such as Employee State Insurance, Provident Fund etc.
► Four options are there in Heads for Benefits. ESI and PF are fixed according to the labour law.
►First is how to set ESI. To give equation to ESI, if you are taking the component given in monthly earning, then give Basic+ HRA+ DA. If you are taking bonus, performanceincentive, overtime etc. for PF, then this formula is applied.
► Next is Provident fund.In PF calculation, HRA will not be considered. As per labour law, 1800 is limit value. Then apply formula. Next is WWF. If you put a tick, the workers welfare fund is active. 20 is the fixed amount here. Next is Heads for Deductions. It means the amount deducted from the employees salary. Here are also the components needed for the company can be created in salary head menu.