Payroll and payslips

Set pay components and salary structures, give each employee a salary, run monthly payroll with loss of pay and statutory deductions, finalize, and share payslips.

Payroll turns salaries into monthly payslips. A run works out each employee's paid days, earnings, deductions and claims to reimburse, then you check it, finalize it and pay.

Before you start: payroll needs Full control on People (HR). Employees only ever see their own finalized payslips.

1. Pay components and structures

Under Rules & settings › Pay:

  • Pay components — the lines on a payslip. Each is an Earning, a Deduction or an Employer contribution (a cost, not in net pay); Taxable; Reduce for unpaid days; and, for statutory lines, Computed by statute.
  • Salary structures — how a CTC splits into components. Each line is Worked out as a fixed amount, a % of CTC, a % of basic, a % of gross, or the balance (whatever is left of monthly CTC after the other earnings and employer PF).

The starting Standard structure is basic 40% of CTC, HRA 50% of basic and special allowance the balance.

2. Salaries

Payroll › Salaries lists everyone with their structure, annual CTC and monthly amount. Click an employee to set a salary: Structure, Annual CTC, Effective from, optional overrides for single components and a fixed monthly TDS. The preview shows the monthly breakdown and Monthly net pay (full month).

Setting an employee's salary with the monthly breakdown

A raise is a new salary with a later Effective from — earlier ones stay in History. A run uses the salary in effect at the end of its month.

3. Run payroll

  1. Go to Payroll › Runs and click New run. Pick the month.
  2. The run lists everyone employed that month with paid days, loss-of-pay days, gross, deductions, reimbursements and net pay. Employees, Gross, Deductions, Net pay and Employer cost sit on top.
  3. Click a payslip to change it: Loss-of-pay days, One-off adjustments (an earning such as a bonus or arrears, or a deduction such as an advance), or Hold this employee's pay this month.
  4. Recompute picks up new salaries, leave and claims — your changes to payslips are kept.

A draft payroll run with totals and a payslip per employee

How a payslip is worked out

  • Paid days = days employed in the month less loss-of-pay days. Someone joining or leaving mid-month is paid for their days.
  • Components marked Reduce for unpaid days are reduced by the same share.
  • Statutory deductions are worked out on the reduced amounts. See Statutory deductions.
  • Approved expense claims not yet paid are added as reimbursements — outside gross and tax.
  • Amounts are exact to the paisa; statutory lines are rounded to whole rupees. Round net pay to whole units is under Rules & settings › Pay.

4. Finalize and pay

  1. Click Finalize. The run is worked out one last time and locked.
  2. Payslips are released — each employee sees theirs under My HR and Payroll › My payslips, and can download the PDF.
  3. Claims on the run are marked reimbursed.
  4. If you mapped payroll accounts, one journal entry is posted to Accounting: salaries expense against net pay payable and statutory dues payable. Map them under Rules & settings › Pay › Ledger.
  5. Download the Bank transfer file (CSV of names, accounts, IFSC and net pay) for your bank, and the Payroll register for your records.
  6. When the money has gone out, click Mark paid.

A payslip with earnings, deductions and net pay

A finalized run can't be edited. A draft run can be deleted and started again.

Troubleshooting

Someone is missing from the run They have no salary, or weren't employed that month. Payroll › Salaries shows No salary beside them.

"Not posted" Map the three payroll accounts under Rules & settings › Pay › Ledger; runs finalized after that post on their own.