The Earnings section in payroll defines all salary components that contribute to an employee’s gross pay. These may include Basic Pay, House Rent Allowance (HRA), Special Allowances, Overtime, Incentives, and other benefits as per company policy.

Configuring Salary Earnings

• Navigate to Settings → Payroll → Salary Components → Earnings.

• All default earnings will be displayed in the grid. Click the three dots in the Actions column and select Edit.

• Select an Earning Type. If none of the options fit your requirements, choose Add Custom Earnings Type.

• Enter the name of the earning which will be displayed on payslips.

• A pop-up window will appear showing the default earnings which are associated with the Section 10 as per the Government norms, choose the Calculation Type either Percentage(from Basic) or Fixed Amount or Custom Formula.

• If you selected Custom Formula to calculate your employee’s earnings. With this feature, you can add components, functions, and operators to create your earnings formula. You can also check the formula for accuracy. This makes it simpler for you to customize and calculate your employee’s earnings, especially when dealing with multiple variables.

• Select whether you want to include this earning as a Flexible Benefit Plan (FBP) component. You can also restrict your employees from overriding the FBP amount by checking the Restrict employee from overriding the FBP amount option. Once you do this, they can opt for either the maximum FBP value (specified here) or exclude the FBP component entirely.

• Select whether you want to consider the earning for EPF contribution. Mention if it should always be considered or only when the PF wages are less than ₹15,000.

• Choose whether you want to consider the earning for ESI contribution and also include the earning for Special Wages, Notice Pay, Overtime, Bonus, Advance Salary, Insurance, Leave Encashment, Gratuity, NPS, Compensatory Off, Paid Leave Deduction.

• Click Save.

• To add a new earning, click + Add Earning, enter the Earning Name, complete all mandatory fields, and then click Save.

FBP allows your employees to personalise their salary structure by choosing how much they want to receive under each component. This helps them reduce their income tax.

All fixed earnings will be included as part of the CTC, will be considered as taxable, and will be shown in the payslip as per the Government norms.

Note: After payroll is set up for the components you have associated with one or more employees, you can only edit the Name and Amount/Percentage. The changes made to Amount/Percentage will apply only to new employees.

Fig: Edit Earnings 

Fig: Default Earnings

Fig: Add Custom Earnings Type

Fig: Custom Formula