Deep Guide to Running Payroll

Prerequisites & Setup: Before generating a payroll run, you must guarantee:

• Every active employee has an assigned Salary Structure (CTC Revision).
• All Leaves and Attendances for the month are finalized and approved by managers.
• Statutory configurations (EPF rates, ESIC limits, Professional Tax states) are up to date under Settings.

Step-by-step instructions (Processing a Run):

• Navigate to Payroll > Payroll Runs.
• Click New Payroll Run.
• Select the Month and Year. The system defaults the start and end dates based on your global Salary Cycle settings (e.g., 1st to 31st).
• Click Create Run. The run is now in a `draft` status.
• Click Process Payroll. This triggers the core background engine.

How It Works: When you click "Process", the system performs several automated operations:

• Attendance Processing: The system checks every employee's daily logs. It counts the number of authorized paid days (Present + Approved Leaves + Comp Offs + Holidays) and divides this by the total days in the month to get a proration factor.
• Salary Components: The system determines the correct order to calculate components. For example, since HRA relies on Basic, Basic is calculated before HRA.
• Formula Evaluation: The system takes the employee's CTC and calculates the mathematical formulas defined in their Salary Structure. It then accounts for any Loss of Pay using the attendance data.
• Statutory Deductions: After standard earnings are calculated, the system calculates taxes and compliance deductions (like EPF, ESIC, and TDS) based on government limits.
• CTC Balancing: A dynamically adjusting component ensures that the final Gross Earnings plus Employer Contributions exactly match the employee's declared CTC, preventing rounding errors.

What happens after processing:

• The Run moves to `completed`.
• Payslips are generated in an `initial` status. You can click into individual payslips to review the exact line-by-line calculation breakdown.
• Once verified, click Publish Payslips to make them visible to employees, or mark them as `paid` to generate the final PDF documents.

Troubleshooting & FAQs:

• *Q: The payroll is stuck in 'processing' for a long time.*

A: For large organizations (500+ employees), the complex formula evaluation takes time. Wait a few minutes and refresh the page.

• *Q: An employee's HRA calculation looks wrong.*

A: Check their assigned Salary Structure. Ensure the HRA formula (e.g., `BASIC * 0.4`) is correct, and verify they didn't have heavy Loss of Pay reducing the base amount.