Salary Structure
- The details of an employee’s pay, including how the various components of compensation are broken down, are known as the wage structure.
- Any adjustments made to the components of the salary structure, such as the types of tax exemptions claimed, may have a significant effect on the employee’s activities.
- Among other things, Frappe HR lets you specify the Earnings and Deductions of a Salary Structure, Payroll Frequency, and Payment Mode.
To view the Salary Structure, visit:
1. Prerequisites
You need have the following before creating a salary structure:
2. How to Establish a Pay Structure
- Click on New in the Salary Structure list.
- Put the name of the salary structure here.
- Choose the Payroll Frequency and Company Name.
- Save, then send it in.
3. Characteristics
3.1 Deductions and Earnings
Earnings outline the components of an employee’s salary that they get. These elements, which are added to the employee’s total salary, usually consist of basic, allowances, bonuses, and incentives.
Deductions, on the other hand, outline the salary components that are subtracted from the worker’s overall compensation. Usually, these include the taxes.
In the Component column, choose the Salary Component to create Earnings and Deductions. When creating the Salary Component, enter the Formula/Condition if it wasn’t already given. In the Amount column, you can optionally specify a predetermined amount.
Pay Structure
3.2 Account:
This area allows you to specify the Payment Account and Mode of Payment that will be used to pay the salary.
3.3 Timesheet-based Salary Structure:
The company can pay its employees according to their working hours by using Frappe HR to design the salary structure for the salary slip based on the timesheet.
3.4 Procedure for developing a timesheet-based salary structure:
- Click on New after selecting Salary Structure List.
- Click the Salary Slip Based on Timesheet checkbox.
- Choose the Pay Component.
- Put in the hourly rate.
- The amount for working hours for the chosen Salary Component will be determined based on the rate that was entered.
- Save, then send it in.
- Make a salary slip using timesheets as a guide.
3.5 Daily Leave Encashment Amount
If an employee has encashable leaves, you can specify the daily leave encashment amount for this specific salary structure in this field. The value of the Salary component will be determined in the Salary Slip based on the ‘Earning Component’ specified in the encashed Leave Type and the amount per day.
3.6 Maximum Advantages (Amount)
- The Maximum Benefits Amount for the Salary Structure can be entered in this section. This amount will be paid against the Salary Component in the Salary Structure that has the “Is Flexible Benefits” checkbox selected if this field is filled in.
- After all the data has been saved and submitted, you can use the Salary Structure Assignment Tool to allocate the Salary Structure by clicking the Create button and choosing ‘Single Assignment’ to assign one employee or ‘Bulk Assignments’ to assign several employees.
- By clicking the Actions button and choosing ‘Preview Salary Slip,’ you may also see a preview of the related salary slip.
These elements work together to ensure accurate payroll processing, compliance with statutory requirements, and transparency for both the organization and employees.
