Introduction/Purpose:

The purpose of the contribution component in payroll within an HRMS is to manage and track employee contributions and deductions related to their compensation.

How To Navigate:

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

Listing:

The Contribution Components listing allows users to view all Contribution Components records. The key features of the Contribution 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 
  • Print Name 
  • Formula code 
  • Code,  
  • 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 Contribution Components listing

Recording & Update:

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

• Contribution Head*: This field refers to the specific category or label assigned to the contribution, such as 
  • “Retirement Savings” 
  • “Health Insurance”  
  • “Tax Deduction.”

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

• Contribution Type*: This field indicates the type of contribution, such as 
  • Employee contribution
  • Employer contribution
  • A combination of both.
    

Calculation Logic

• Calculation Base: This field identifies the base value or parameter on which the contribution 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 holidays.
    
    
• Calculation Payable Value On: This field determines the component or condition based on which the Contribution component 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: This field refers to the frequency or period (weekly, bi-weekly, monthly) for which the contribution calculations are applied during payroll processing. 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  
  • Fourth Quarter End

• Tax Relief Limit: This field sets the maximum limit up to which the contribution amount qualifies for tax relief or exemption.

• Tax Relief Value: This field specifies the actual tax relief amount associated with the contribution.

Employee Deduction

• Calculation Type: This field indicates the method used to calculate employee deductions, such as a fixed amount, percentage of salary, or a custom formula.

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

• Output Value: This field represents the final result or value obtained after performing the calculation for employee deductions.

Employer Deduction 

• Calculation Type: This field determines the method used to calculate employer deductions, such as fixed amounts, percentage-based calculations, or custom formulas.

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

• Output Value: This field represents the final result or value obtained after performing the calculation for employer deductions.

• Calculation Option: This field determines how the contribution will be calculated. It may have options such as fixed amount, percentage of salary, or based on specific formulas.

• Show in Slip: This field determines whether the contribution will be displayed on the employee’s payslip.

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

• Add to Gross Value: This field determines whether the contribution amount 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 contribution requires submission of supporting documents or vouchers from the employee.

• Slab Required: This field specifies whether the contribution 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 contribution 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 contribution 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 contribution 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.

The user can perform the following action in this section:

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

These Contribution 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

• 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 Contribution Components record.

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

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

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

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