Content:
A Salary Structure is a blueprint that tells the payroll engine how to break down an employee's total Cost to Company (CTC) into various earnings (Basic, HRA, Allowances) and deductions.
Where to find it:
A Salary Structure is a blueprint that tells the payroll engine how to break down an employee's total Cost to Company (CTC) into various earnings (Basic, HRA, Allowances) and deductions.
- Navigate to Payroll > Components to define individual line items.
- Navigate to Payroll > Structures to group them.
- Component Name & Code: The name of the component and its unique code (e.g., BASIC). The code `SPECIAL_ALLOWANCE` is extremely important as it acts as the "shock absorber" to ensure math exactly equals CTC.
- Category: Choose the category such as `salary`, `allowance`, `provident_fund`, `tax`, etc.
- Calculation Type: Choose `FLAT` (a fixed amount like ₹1000) or `FORMULA` (e.g., `CTC * 0.4`).
- Preferences:
- Main Component: Identifies primary salary structure elements.
- Prorate on LOP: If checked, this component scales down based on working days.
- Disable To Employee: If checked, hides this component from payslips.
- Go to Payroll > Employee Revisions.
- Click New Revision.
- Select the Employee, the Salary Structure, and enter their total Annual CTC.
- Set the Effective From date. If this date is in the middle of a month (e.g., they got a mid-month raise), the payroll engine will automatically run two separate prorated calculations for that month and merge them into a single payslip.
- Circular Dependencies: You cannot create a formula where Component A relies on Component B, and Component B relies on Component A. The system will throw an error and block the structure creation.
- Missing Special Allowance: A structure should typically contain a component with code `SPECIAL_ALLOWANCE` to balance the math if a total CTC is enforced.