Introduction/Purpose:

The purpose of variable earning components in an HRMS is to incentivize, recognize, and reward employees for their performance, achievements, and contributions to the organization. 

How To Navigate:

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

Listing:

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

• Record Filter: The filter option allows users to filter the list of records based on visible columns

• 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 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”.

• 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 Variable Earning Components listing

Recording & Update:

Users can add new Variable 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
  • Variable formula.
    

• Calculation Value *: This field represents the numerical value used in the calculation logic of the Variable earning component. It can be a
  • fixed amount
  • a percentage,
  • Component
  • Numerical Value

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

• 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
  • Present Days + Paid leaves + Holiday
  • (Present Days) + (Paid Leaves) + (Week Offs) + (Holidays)
  • Short hours + Absent hours
  • Absent Days

• Payrun Term: This field identifies the pay run term or frequency for which the variable earning 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 represents the maximum allowable amount for tax relief on the earning component. The user has to choose an option from the drop-down menu:-
  • None
  • Fixed
  • Percentage
  • Formula

• 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.
  • If the user chooses yes,” then the earning component will display in the payslip.
  • If the user chooses no,” then the earning component will not display in the payslip.
    

• 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 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 third-party vendor or external entity involved in managing or processing the earning component, such as an outsourced payroll provider or benefits administrator.

• Prorata 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

• 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 perform the following action in this section:

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

These Variable 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.

• 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 earnings 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 earnings component record.

• Discard: This option allows the user to discard the Variable Earning 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 Earning Components, such as
  • Status (pending, Submit for Approval,  approved).
  • Time and Date of Transaction
  • Execution time