Introduction/Purpose:

The variable deduction component in an HRMS (Human Resource Management System) serves the purpose of managing and processing various types of deductions that are subject to change or variability based on specific conditions or events.  

How To Navigate:

The navigation to record a Variable deduction Components in the HRMS system typically involves the following steps:

• Click on the main navigation icon which is located on the top right corner of the screen then click on the Payroll section which is located on the left side menus on the screen.

• Click on the Variable Deduction Components section which is located in the masters under Payroll. After clicking on this link you can navigate the Variable Deduction component record Listing.

Listing:

The Variable Deduction Components listing allows users to view all Variable Deduction Components records. The key features of the Variable Deduction Components listing are included below:

• Record Filter
  The filter option allows users to filter the list of records based on visible columns, such as
  • Name  
  • Pay Cycle  
  • Code   
  • Formula code  
  • order 
  • calculation option  
  • Calculation Type  
  • Approval Status.

• Advance Search
  This option allows users to filter data with single or Multiple criteria in Column Name with options like
  • equal
  • Not Equal
  • Begins 
  • Does Not Begin with
  • Ends With
  • Does Not End with
  • Contains 
  • Does Not Contain.

• Hide/Show Column:- 
  • This option allows users to customize columns by adding/removing columns to display from the Listing page.
  • In this option user have to select the column which they want to view in the list, if the user unchecks/unselect all column then the system will give an error message that “Please check at least one column”
  • The user can view the following action in this section
    • Ok: On clicking the “Ok” button, the user can submit the checked option, and based on the selection, the column will display to the user in the list.
    • Cancel: On clicking this button the user can cancel the check column

• Delete:
  • The Delete option allows the user to delete the record. The user first has to select at least one record; otherwise, the system will give an error message “Please select at least one record”.
  • After clicking on the delete button, a pop-up message will appear: “Are you sure you want to delete the selected record?”
  • Along with this message, the user can perform the following actions:
    • Delete: This option allows the user to delete the selected record.
    • Cancel: This option allows the user to cancel the selected record and go back to the Variable Deduction Components listing

Recording & Update:

Users can add new Variable Deduction Components records by clicking the “Add New” Button and fill the required fields

• Deduction Head *: This field represents the name or description of the deduction category or type. It identifies the specific deduction item, such as income tax, health insurance premium, loan repayment, or any other deduction applicable to employees.

• Print Name:  It refers to the name of the deduction that will be displayed on employee payslips or statements.
  

Calculation Logic

• Calculation Type:   This field defines the method or formula used to calculate the Variable deduction amount. It can be 
  • Percentage  
  • Fixed  
  • Formula
  • Percentage From Earning.
    

• Calculation Value *: It represents the value or amount used in the calculation of the variable deduction, depending on the calculation type chosen such as
  • Employee Annual Gross fixed  
  • Employee Annual CTC fixed  
  • Claim/Voucher Amount fixed  
  • 13th Month Salary component  
  • Basic Salary component  
  • Housing Allowance component  
  • Leave Allowances component  
  • Lunch Allowance component  
  • Transport Allowance component  
  • Driver Allowance component  
  • Burial Grant component  
  • Car Maintenance Allowance component  
  • Child Birth component  
  • Domestic Staff Allowances component  
  • Fuel Allowance component  
  • Other Allowances component  
  • Overtime component.

• Output Value is *: This field indicates the resulting Variable deduction value after the calculation is applied. The output Value is calculated based on 
  • annually 
  • weekly 
  • quarterly 
  • monthly 
  • half-yearly 
  • Weekly
  • Daily

• Calculation Base *: It refers to the base on which the deduction calculation is applied. It could be the 
  • Full biometric period days 
  • Full Pay Cycle Days 
  • period days – week off 
  • period days – week off – holidays 
  • period days holidays.

• Calculation Payable Value On *:  This field determines the component or condition based on which the Variable deduction will be payable. It could be based on 
  • Full biometric period days 
  • Full Pay Cycle Days 
  • Present 
  • Present Days + Leave Days 
  • Present Days + Paid leaves + Week off
  • Present Days + Paid leaves + Holiday
  • (Present Days) + (Paid Leaves) + (Week Offs) + (Holidays)
  • Short hours + Absent hours
  • Absent Day

• Payrun Term: It represents the specific pay period or frequency for which the Variable deduction will be applied. This field identifies the pay run term or frequency for which the  Variable deduction component will be included in payroll processing, such as  
  • Pay Calendar Start
  • Pay Calendar Quarter
  • Pay Calendar Half Year 
  • Pay Calendar End 
  • Employee Joining Quarter (Join Month + multiple of 3 Month)  
  • Employee Joining Half Year(Join Month + multiple of 6 Month)  
  • Employee Joining Annual (Join Month + 12 Month)  
  • Specific Date  
  • First Quarter Start  
  • First Quarter End  
  • Second Quarter Start  
  • Second Quarter End  
  • Third Quarter Start  
  • Third Quarter End  
  • Fourth Quarter Start  
  • Fourth Quarter End

• Tax Relief Limit: This field specifies the maximum limit or threshold up to which tax relief or exemption is applicable for the deduction. It is often relevant for deductions such as tax-saving investments or specific allowances.

• Tax Relief Value: It denotes the amount or value eligible for tax relief or exemption within the specified limit mentioned in the previous field.

• Calculation Option:  This field provides additional options or parameters for the deduction calculation. Users can choose options such as
  • Days
  • Hourly

• Show in Slip: This field determines whether the Variable deduction component should be displayed on the employee’s payslip or salary statement.
  • If the user chooses yes,” then the variable deduction component will display in the payslip.
  • If the user chooses no,” then the variable deduction component will not display in the payslip
    

• Part of CTC: This field indicates whether the deduction is considered as part of the Cost to Company (CTC) calculation, which represents the total compensation package of an employee.

• Add to Gross Value: By checking this field, the Variable deduction amount will be added to the employee’s gross salary for calculation purposes, potentially affecting other calculations dependent on the gross salary.

• Allow Employee Wise Change: By checking this field user will be allowed to modify this deduction component amount in the required employee record..

• Against Claim Employee (Voucher/Proof): This field indicates whether the variable deduction requires employees to provide supporting documentation, vouchers, or proofs to validate their claim for the deduction.

• Slab Required: It signifies whether the deduction calculation is based on predefined slabs or tiers, where the deduction amount varies based on specified income ranges or thresholds.

• Accrue for Future Payout: If enabled, the deduction amount is accumulated over time and paid out at a later date, such as in the case of future loan repayment or deferred compensation. By checking this field the user has to select the following field from the drop-down menu.
  • Pay Period 
  • Pay Calendar Start
  • Pay Calendar Quarter  
  • Pay Calendar Half-Year  
  • Pay Calendar End  
  • Employee Joining Quarter (Join Month + multiple of 3 Month)  
  • Employee Joining Half Year(Join Month + multiple of 6 Month)  
  • Employee Joining Annual (Join Month + 12 Month)  
  • Specific Date  
  • First Quarter Start  
  • First Quarter End  
  • Second Quarter Start  
  • Second Quarter End

• Third-Party Vendor: This field identifies any external vendor or party involved in managing the deduction process, such as a benefits provider or financial institution. By Checking this field the user can get a drop menu to select third-party vendors.
  • Employee Expense Claim Payable 11110144.00 NGN

• Prorate Applied: It indicates whether the deduction amount is prorated or adjusted based on partial periods of employment, such as when an employee joins.
  

Ledger

• Salary Payable Account: This field specifies the ledger or accounting account used for recording the liability or payable associated with the deduction component. It represents the financial account where the deduction component amount is reflected. The user can choose from the drop-down menu
  • Local Travelling Expenses 313118 NGN   
  • Email and Internet Subscription Charges 313941 NGN  
  • Accruals 13th Month 750112 NGN   
  • Employee vehicles Repair & Maintenance 312325 NGN  
  • International Travelling Expenses 313115 NGN  
  • All Other Legal Fees 310221 NGN   
  • Other vehicles Repair & Maintenance 3123212 NGN   
  • Entertainment for Employees Travel Related 313112 NGN  
  • All Other Office furniture 412041 NGN  
  • Educational/Membership Subscriptions 312411 NGN  
  • Purchases of All Consumable Materials 310115 NGN  
  • Employee Net Salaries 750111 NGN  
  • Local Employee Basic Salaries and Wages 311111 NGN
    
    
• Expense Account: This field represents the ledger or accounting account used for recording the expense associated with the deduction component.

The user can perform the following action in this section:

• Submit: This option allows the user to submit the Variable Deduction Components record in the database.

These Variable Deduction Components records will get saved if No approval flow is defined and if any approval flow is defined it will go for approval to the respective approving authority

• Discard: This option allows the user to discard the Variable Deduction Components record and back to the Variable Deduction Components listings 

• Action: The action option allows the user to edit the record if the record has not been approved or if the user is the final approver. Users can also view the Activity Log for that transaction.

• Edit: On clicking the edit option, the user will be able to edit the Variable Deduction Components record.

The user will be able to perform the following actions in this section:

• Update: This option allows the user to Update the Variable Deduction Components record.

• Discard: This option allows the user to discard the Variable Deduction Components record and does not change the selected record.

• Activity Log: In the Activity Log option, the user can view the transaction history of Variable Deduction Components, such as
  • Status (pending, Submit for Approval,  approved).
  • Time and Date of Transaction
  • Execution time