Introduction/Purpose:

The purpose of earning components is to manage and track the various types of earnings or income that an employee can receive as part of their compensation package. Earning components are used to calculate an employee’s total pay and ensure accurate and consistent payroll processing.

How To Navigate:

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

Listing:

The Pay Period listing allows users to view all Pay Period records. The key features of the Pay Period 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 
  • From Date 
  • To Date 
  • Payout Date 
  • Pay Cycle starts 
  • Pay Cycle End 
  • Period Status
  • Added By 
  • Added Date

• 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
  • 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 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”.

• Hide/Show 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 Earning Component listing

Recording & Update:

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

• Earning Head*: This field represents the name or label of the earning component, such as Basic Salary, Overtime, Bonus, etc. It helps identify and categorize different types of earnings.

• Print Name*: This field specifies the name of the earning component as it should appear on payslips or other relevant documents. It can be customized to match the terminology used within the organization.
  

Calculation Logic

• Calculation Type:  This field indicates the type of calculation used for the earning component, such as a fixed amount, percentage, hourly rate, or variable formula.

• Calculation Value *: This field represents the numerical value used in the calculation logic of the earning component. It can be a fixed amount, a percentage, or any other numerical value required for the calculation.

• Output Value is *: This field specifies the output values for annually, weekly, quarterly, monthly, half-yearly etc.

• Calculation Base *: This field specifies the element on which the earning 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.

• Calculation Payable Value On *: This field determines the condition or trigger on which the earning component becomes 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

• Payrun Term: This field identifies the payrun term or frequency for which the earning component will be included in payroll processing, such as pay period, pay calendar Start, Pay calendar quarter, and pay calendar half year.

• Tax Relief Limit: This field represents the maximum allowable amount for tax relief on the earning component. It specifies the threshold beyond which tax relief or exemptions may not apply.

• Tax Relief Value: This field indicates the specific amount eligible for tax relief or exemptions associated with the earning component.

• Calculation Option:  This field allows for selecting specific options or preferences related to the earning component calculation, such as
  • Hourly
  • Days.

• Show in Slip: This field determines whether the earning component should be displayed on the employee’s payslip or salary statement.

• Part of CTC: This field specifies whether the earning component should be included in the calculation of Cost to Company (CTC). CTC refers to the total cost incurred by the employer for an employee, including salary, benefits, and other allowances.

• Add to Gross Value: This field indicates whether the earning component should be added to the employee’s gross salary or total earnings.

• 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 earning component requires employees to submit supporting documentation, such as vouchers or proofs, for claiming or validating the amount.

• Slab Required: This field specifies whether the earning component calculation requires multiple slabs or tiers based on predefined ranges or categories. 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 earning component should be accrued or accumulated for future payout or settlement, rather than being paid immediately. By Checking this field the user has to select. 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
  • Employee Expense Claim Payable 11110144.00 NGN.

• Third-Party Vendor: This field identifies any third-party vendor or external entity involved in managing or processing the earning component, such as an outsourced payroll provider or benefits administrator. By Checking this field the user can get a drop menu to select third-party vendor

• Prorate Applied: This field indicates whether proration rules should be applied to the earning component, such as for employees who join or leave the organization mid-pay period, resulting in a partial earning amount.

Ledger

• “+” icon: On clicking “+” user can view following sections
  • Salary Payable Account: This field specifies the ledger or accounting account used for recording the liability or payable associated with the earning component. It represents the financial account where the earning 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 component. 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

The user can perform the following action in this section:

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

These Earning 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 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 Earning Components record.

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

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

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

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