Introduction
Understanding and managing salary components is a crucial aspect of the payroll process. These components, which include items like basic pay, allowances, and arrears, can be customized to fit the unique needs of your organization. With Empress, you can effortlessly define and manage these components, ensuring an efficient and accurate payroll process.
To access this feature, follow this path: Home > Human Resources > Payroll > Salary Component.
Creating a Salary Component
Creating a new Salary Component in Empress is simple and straightforward. Here are the steps to do it:
- Navigate to the Salary Component list and click on ‘New’.
- Enter the Name and Abbreviation of the component.
- Optionally, you can provide a Description for the Salary Component.
- Enter your Company’s name and the Default Account for the Salary Component in the Accounts table.
- Click ‘Save’ to finish.
Advanced Features
Empress also provides a set of advanced features that allow you to further customize your salary components.
Conditions and Formulas
Empress provides the ability to define conditions and formulas for calculating salary components. If you need to calculate a component based on a specific formula, simply enable the ‘Amount based on formula’ checkbox. If the Salary Component is a predetermined amount, you can directly enter it into the Amount field.
Note: You can also define the Amount and Formula/Condition for a Salary Component directly in the Salary Structure. If specified in the Salary Component document, this information is directly fetched in the Salary Structure when the Component is selected.
Additional Properties
Empress offers a set of additional properties that you can enable or disable for your salary components. These include:
- Is Payable: Indicates if the Salary Component is payable.
- Depends on Payment Days: Enables Salary Component calculation based on the number of working days.
- Is Tax Applicable: Allows tax application on the Salary Component.
- Deduct Full Tax on Selected Payroll Date: Useful if you want to deduct tax in a specific payroll month.
- Round to the Nearest Integer: Rounds the Salary Component amount to the nearest integer.
- Statistical Component: The value does not contribute to earnings or deductions but can be referenced by other components.
- Do Not Include in Total: Ensures the Salary Component is not included in the total salary.
- Variable Based On Taxable Salary: Automatically calculates the component based on the applicable Income Tax Slab.
- Exempted from Income Tax: Deducts the full amount from taxable income before calculating income tax.
- Disabled: Disables this Salary Component.
Flexible Benefits
Empress also offers the ability to set a Salary Component as a ‘Flexible Benefit’. These benefits allow employees to choose the benefits they want from a package offered by their employer. To set a Salary Component as a Flexible Benefit, check the ‘Is Flexible Benefit’ checkbox and enter the maximum yearly amount for this benefit in the ‘Max Benefit Amount (Yearly)’ field.
Additional attributes of Flexible Benefits can be enabled using checkboxes:
- Pay Against Benefit Claim: Enables payment of this benefit via the Employee Benefit Claim.
- Only Tax Impact (Cannot Claim But Part of Taxable Income): The flexible benefit will be part of taxable income.
- Create Separate Payment Entry Against Benefit Claim: Allows creation of a separate payment entry against the Benefit Claim.
In conclusion, the Salary Component feature in Empress provides an efficient way to manage and customize your payroll process. With a range of flexible and advanced features, you can ensure accuracy and efficiency in your payroll management, tailored to your organization’s specific needs and policies. For additional assistance or inquiries, feel free to refer to our support resources or reach out to our dedicated support team.