Salary components
Add earnings and deductions such as Basic, HRA or a canteen deduction, choose how each is worked out, and set how it counts for PF, ESI, PT and tax.
On this page
Components are the building blocks of a salary. Each one is an earning, a deduction, an employer contribution or a reimbursement.
See your components
Go to Salary. The first page, Salary components, has tabs: All, Earnings, Deductions and Made by payroll. Components made by payroll, such as PF, ESI and Professional Tax, are marked System. Payroll works them out itself.
Add a component
- Below the list, find the Add a component form.
- Choose the Type: Earning, Deduction, Employer contribution or Reimbursement.
- For an earning, choose the Earning type, for example Basic, House rent allowance, Dearness allowance or Special allowance.
- Enter the Name, the Code in capital letters (used in formulas) and the Name on payslip.
- Choose the Calculation. See the table below.
- Set how it counts for statutory items and tax. See the next section.
- Select Save.
You need the Set up payroll permission.
| Calculation | How the amount is found |
|---|---|
| Fixed amount | The amount set in the salary |
| Percent of | A share of other components or of gross. Enter 40 for 40% |
| Formula | Built from component codes with + − × ÷, min and max |
| Rest of gross | Whatever is left of gross after the other lines |
Some components made by payroll show From attendance, such as overtime and fines, or Entered in payroll. You cannot choose these two for a component you add.
How it counts
| Setting | Choices |
|---|---|
| Counts for PF | Always, Only below the PF ceiling or No |
| Counts for ESI | Yes or No |
| Counts for Professional Tax | Yes or No |
| Counts for LWF | Yes or No |
| Counts for gratuity | Yes or No |
| Counts for statutory bonus | Yes or No |
| Counts for the overtime rate | Yes or No |
| Taxable | Yes or No |
| Wage class under the labour codes | Wages (basic, DA, retaining allowance), Allowance outside wages (50% rule) or Not remuneration |
| Reduce for unpaid days | Whether loss-of-pay days reduce it |
| Deducted | Deductions only: Before income tax or After income tax |
Select Edit to change a component.
Related articles
Create a salary template
Build a reusable salary layout from components, choose how each line is worked out and how payable days are counted, then use it for many staff.
Set a staff member's salary
Set or revise a salary from a template and an amount such as monthly gross or annual CTC, preview the breakup and take-home, and see the history.
PF and ESI settings
Choose how employer PF and ESI are worked out for the business, which staff are covered, and the PF, UAN and ESI details each staff profile needs.
Still need help?
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