Introduction/Purpose:

The purpose of a salary structure in an HRMS is to establish a systematic framework for determining and administering employee compensation within an organization.

How To Navigate:

The navigation to record a Salary Structure 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 Salary Structure section which is located in the masters under Payroll. After clicking on this link you can navigate to Salary Structure Record Listing.

Listing:

The Salary Structure listing allows users to view all salary Structure records. The key features of the salary structure 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 
  • Deduction Limit 
  • Added Date 
  • Added by 
  • Applicable for payee 
  • Active employee for current pay period 
  • Payable Account 
  • Error report 
  • 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

• Export Data: Selected Records, Current Page records or All records can be exported by users with listed Columns or All Columns to a spreadsheet or other file format for further analysis or reporting.

• 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 Salary Structure listing

Recording & Update

Users can add new salary structure records by clicking the “Add New” Button and filling in the required fields

• Name*: The “Name” is a field that specifies the full name of the salary structure such as the General salary structure.

• Pay cycle*: Pay Cycle is a field that specifies what the employee gets in salary on a monthly, bi-weekly, weekly, and daily basis.

• Effective from *: Effective From is a field that specifies the effective date from which the Salary structure is applied.

• Valid up to: Valid up to is a field that specifies the date up to which the salary structure ends.

• Deduction Limit *: The “deduction limit” field in a salary structure payroll typically refers to the maximum amount or cap on certain deductions that can be applied to an employee’s salary.

• Salary Payable Amount: The “salary payable amount” field in a salary structure payroll refers to the actual amount of salary that is payable to an employee after considering all the components and deductions in the salary structure.

• CTC Amount: The CTC amount is usually specified as a fixed figure for each employee and is based on various components that make up the total cost to the company.

• Gross Amount: The “gross amount” field in a salary structure refers to the total amount of an employee’s salary before any deductions or taxes are applied. It represents the sum of all the components and allowances included in the salary structure.

• Applicable for Payee *: “Applicable for payee” in a salary structure typically refers to whether a particular component or element is applicable to the employee as a payee. Users can select the “yes” or “no” option.

After filling in this information user can see three options to select: 

• Add New 
• Quick Add
• Reload

Add New: In the Add New button, the user can add a new contribution. For adding a new contribution, the user has to fill out some details, such as

• Component*: The “component” field in a salary structure refers to the individual elements or components that make up an employee’s total compensation package. These components represent the different aspects of an employee’s salary, benefits, allowances, and deductions.

• Print Name*: This field contains the name or description of the contribution that will be displayed on employee pay slips or statements.
  

Calculation 

• Calculation Type*: This field indicates the method used to calculate the contribution such as percentage, fixed and formula.

• Calculation Value *:  This field contains the value or percentage used in the calculation of employee deductions.

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

• Calculation Base*: This field identifies the base value or parameter on which the Component calculation is performed.  It could be the
  • Full biometric period days
  • Full Pay Cycle Days 
  • period days – week off 
  • period days – week off – holidays 
  • period days holiday

• Calculation Payable Value On*: This field determines the specific elements or components on which the component calculation is based. It could be the
  • Full biometric period days 
  • Full Pay Cycle Days 
  • period days – week off 
  • period days – week off – holidays 
  • period days holidays

• Payrun Term: This field refers to the frequency or period (weekly, bi-weekly, monthly) for which the component calculations are applied during payroll processing. The user has to select pay run term 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 

• Tax Relief Limit: This field sets the maximum limit up to which the component amount qualifies for tax relief or exemption. The user has to choose option from the drop-down menu:
  • Fixed
  • Percentage
  • Formula: When the user selects the formula option another field will displayed on to screen
    • Tax Relief Formula: The user has to enter the tax relief formula in this field.
      
• Tax Relief Value: This field specifies the actual tax relief amount associated with the component.
   
• From Date  *: “From Date” is a field that specifies the date at which the component starts.

• To Date: “To Date” is a field that specifies the date at which the component ends.
  

Calculation Option:

• Status: The user can select the status such as Active   Inactive
   
• Show In Slip: Users can select the option “such as yes, no or yes>0) to show the salary structure in the slip
  
  
• Currency *: The  “Currency” field specifies the currency in which the salary component is calculated.

• Final Output Formula: The “Final output Formula” is a field that specifies the formula’s output formula is calculated based on the
  • Nearest
  • highest 
  • decimal one 
  • decimal two
  • decimal three.

• Part of CTC: This field indicates whether the component amount is considered part of the employee’s Cost-to-Company (CTC) calculation.

• Add to Gross Value: This field determines whether the salary component should be added to the employee’s gross salary when calculating the total payable amount.

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

• Against Claim Employee (Voucher/Proof): This field indicates whether the salary requires submission of supporting documents or vouchers from the employee.

• Slab Required: This field specifies whether the salary calculation is based on predefined slabs or tiers. By checking this field the user has to select the slab that is configured in slab master from the drop-down menu:
  • TDS slab

• Accrue for Future Payout: This field determines whether the salary amount should be accrued for future payout or disbursed immediately. 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 is used to indicate if the salary is managed by a third-party vendor or provider. By Checking this field the user can get a drop menu to select third-party vendor
  • Employee Expense Claim Payable 11110144.00 NGN

• Prorata Applied: This field determines whether the salary should be prorated or adjusted based on factors like joining date or working hours.
  

Ledger

• Salary Payable Account: This field specifies the ledger or accounting account used for recording the liability or payable associated with the earning and deduction component. It represents the financial account where the earning and 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 Earning and deduction component.

This user can perform the following action in this section:

• Save: This option allows the user to save the entered component record.

• Discard: This option allows the user to discard the entered component record.

Quick Add: In the “Quick Add” button, the user can add a new contribution. In “Quick Add,” the contribution is by default filled in; the user just has to change it.

Earning Component

• 13th Month Salary: 13th-month salary is a type of salary in which companies offer an additional monthly salary as a year-end bonus, it is equivalent to one month’s basic salary and is provided as a form of compensation. 13th-month salary given to employees when employees complete its 12 months mean January-December in a company. If the employee leaves the job in the mid-year then the employee does not get a 13th month salary.

•  Basic Salary: The basic salary is the fixed amount of money that an employee receives for performing their job responsibilities. It is usually the largest component of an employee’s salary.

• Housing Allowance: A housing allowance is an additional payment provided to an employee to cover their housing expenses. It can be a fixed amount or a percentage of the employee’s basic salary.

• Leave Allowances: Leave allowances are payments given to employees when they take time off from work for vacations, personal reasons, or other approved leave types. These allowances ensure that employees receive their regular salary even when they are not working.

• Lunch Allowance: A lunch allowance is a fixed amount provided to employees to cover the cost of their meals during working hours. It is intended to subsidize the expenses incurred by employees for their lunch breaks.

• Transport Allowance: Transport allowance is a payment made to employees to cover their transportation expenses, such as commuting to and from work. It can be provided as a fixed amount or based on the distance travelled or the mode of transportation used.

• Graduate Intern: A graduate intern is an individual who has recently completed their academic studies and joins a company for practical work experience in their field. They may receive a stipend or salary during an internship, which serves as an earning component.

• NYSC: (National Youth Service Corps) NYSC is a program in Nigeria where fresh graduates are required to serve their country for one year. During this period, participants receive a monthly allowance from the government as part of their earnings.

• SIWES: (Student Industrial Work Experience Scheme ) SIWES is a program in Nigeria that provides students with the opportunity to gain practical work experience related to their field of study. Students who participate in SIWES often receive a stipend or allowance during their industrial training period.

• Fixed Term Contract-C&I: Fixed-term contract refers to an employment agreement that is valid for a specific duration. “C&I” could stand for “Commercial and Industrial”. In this context, it may refer to a specific type of fixed-term contract in the commercial and industrial sectors.
  

Variable Earning Component

• Driver Allowance: A driver allowance is an extra payment given to individuals who are employed as drivers. It is meant to compensate them for their time and efforts spent on driving duties.

• Burial Grant:  A burial grant is a one-time payment provided to employees or their families in the event of the death of an employee or their immediate family member.

• Car Maintenance Allowance: A car maintenance allowance is given to employees who use their personal vehicle for work-related purposes. It is intended to help cover the expense incurred for maintaining the vehicle, including fuel costs, regular maintenance, repair and insurance.

• Childbirth: Childbirth-related allowances are provided to employees who become parents. These allowances help offset the cost associated with pregnancy, childbirth, and childcare expenses. The amount and terms of the allowance can vary and it may cover medical expenses and maternity leave benefits.

• Domestic Staff Allowances: Domestic staff allowances are additional payments provided to employees who hire domestic staff members such as housekeepers, cleaners, or nannies. These allowances help cover the wages or salaries of domestic staff members and may be variable based on factors like the number of staff members employed or their responsibilities.

• Fuel Allowance: A fuel allowance is a payment made to employees who use their personal vehicles for work-related travel. It is intended to cover the cost of fuel used during business trips or commuting. The amount can vary based on the distance travelled or prevailing fuel price.

• Other Allowances: Another allowance is a general category that defines additional payments or benefits not explicitly listed. These allowances could include specific reimbursement for work-related expenses, special project bonuses or any variable payments.

• Overtime: Overtime refers to the additional hours worked by an employee beyond their regular working hours. Employees who work overtime may receive extra compensation for their additional time and efforts.

• Travel Expense Claim: A travel expense claim refers to the reimbursement of expenses incurred by employees during business-related travel. It includes costs such as transportation, accommodation, meals and other travel-related expenses.

• Wedding Grant: A wedding grant is a one-time payment provided to employees who are getting married. It is meant to assist with the expenses associated with the wedding ceremony and celebrations. The amount and eligibility criteria for the wedding grant may vary depending on company policies.

• Canteen Allowances: Canteen allowances are payments or subsidies provided to employees for meals consumed at the workplace’s canteen or cafeteria. It can be a fixed amount or based on the actual cost of the meal purchased.

• Motor Boy Allowance: A motor boy allowance is an additional payment provided to individuals who work as a motor boy in transportation or logistics industries. A motor boy typically assists drivers in loading, unloading and transporting goods.
  

Variable Deduction Component

• Biometric Deduction: Biometric deduction typically refers to the deduction made from an employee’s salary for the use of biometric technology, such as fingerprint scanners or facial recognition systems.

• Employee Car Bidding: Employee car bidding is a process where employees can bid for the use of company-owned vehicles for personal purposes.

• Housing Loan Deduction: Housing loan deduction refers to the deduction made from an employee’s salary to repay a loan taken for the purpose of purchasing or constructing a house.

• Other Deduction: “Other deduction” is a general category that encompasses any additional deductions not explicitly listed. These deductions could include various scenarios such as fines or penalties, unpaid leave deductions, union membership fees, or any other deductions.

• Salary Advance:  Salary advance refers to an amount of money that is advanced to an employee before their regular payday. This advance is deducted from the employee’s subsequent salary payments to repay the amount borrowed.

• 13th-month accruals reversal: The 13th-month accruals reversal refers to the reversal of any unutilized or unearned portion of the 13th-month salary or bonus. In some cases, if an employee resigns or is terminated before the end of the year, the employer may reverse the portion of the 13th-month salary that has been accrued but not yet paid out.
  

Deduction Component

• Development Levy: A development levy is a deduction made from an employee’s salary to contribute to a specific fund or initiative aimed at supporting development projects. The levy is typically imposed by the government or local authorities and is used to fund infrastructure development, educational programs

• National Housing Fund: The National Housing Fund (NHF) is a deduction mandated by some countries, such as Nigeria, to provide affordable housing for citizens.

• PAYE: PAYE (pay as you earn) is a deduction that represents the income tax withheld from an employee’s salary by their employer on behalf of the government. It is a method used by tax authorities to collect income tax in a timely manner.

• Union Due: Union dues refer to the regular payments deducted from an employee’s salary as a requirement for being a member of a labour union or trade association. These dues are typically used to support the activities and initiatives undertaken by the union, such as collective bargaining, Advocacy, legal representation or member services.
  

Contribution Component

• Cooperative Deduction: Cooperative deduction refers to the amount deducted from an employee’s salary to contribute to a cooperative society or organization.

• Employee Pension: Employee pension refers to the contribution made by an employee towards their retirement savings. It is a portion of their salary that is set aside and invested in a pension or retirement fund.

• Employer Pension: Employer pension refers to the contribution made by the employer on behalf of the employee towards their retirement savings. Employers often provide retirement benefits as part of the employee’s compensation package.

• Pension – Voluntary Contribution: Pension voluntary contribution allows employees to contribute additional funds towards their retirement savings on a voluntary basis. These contributions are in addition to the mandatory employee and employer pension contributions.

• Admin Fees: Admin fees refer to the charges or fees associated with the administration and management of retirement or pension funds. These fees are typically deducted from the employee’s pension contributions or the overall fund balance.

The user can perform the following action in this section:

• Submit: This option allows the user to submit the Salary Structure record in the database.

These Salary Structure 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 record and no changes will get created if adding or changes will not get saved if updating.

• 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 Salary Structure record.

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

• Update: This option allows the user to Update the Salary Structure record.

• Discard: This option allows the user to discard the Salary Structure record and does not change the selected record.

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