How to Create Payroll Master?- Part 3

After you have entered the above, select the Calculation Period Type from the list-

• Calculation Period : Here select the appropriate calculation period.

• Rounding Method : From the Given list, select the applicable rounding method.

• Computation Info : If "As Computed Value" is selected as the Calculation Type, provide the necessary details for computation method in this section. After that Accept to save Pay Head. You can also create Earning Pay Heads for Basic, DA, Conveyance, HRA and so on.

How to Create Payroll Master?- Part 2

After details regarding Pay Heads are entered, select earnings for employees as the Pay Head Type from the List of Pay Head Types :

Under : Here the user has to select the appropriate group from the list of Groups given there.

Appears in Payslip : Here provide the information whether you want the the Payslip appear in Pay Heads, by selecting 'yes' or 'No'.

Name to appear in Payslip : In Case you have selected 'Yes' in the previous field, give the name that will appear in the Payslip. The text in the Name field will appear by default, which can be changed.

Calculation Type : The following five methods of computing the various Pay Heads are provided by Tally-

As Computed Value : In case the value of the pay head is dependent on other Pay heads this method is to be selected. Here you can define the dependent component by specifying the formula or using the current sub-total or current earning or deduction total. Not only that the slab either by percentage or value can also defined.

As user defined value : In case of Pay Heads with variable values, this method is selected. It will allow the user to manually enter the value at the time of processing the salary.

Flat rate : In cases where the value of the pay head is a fixed amount for a period, this method is applicable.

On Attendance : When the amount of salary is dependent on the attendance data of the employees and the components will get pro-rated based on the attendance, this method is selected.

On Production : This method is used to calculate the production incentive type of pay head.

How to Create Payroll Master?- Part 1

For Payroll Accounting all master records are created through Payroll Info. Select Payroll Info from Gateway of Tally. Payroll Info menu allows you to set up the employee details and standard payroll information, with common payroll fields. It is also used for calculating earning
and deductions.

Noe lets learn the utility and process of creating the payroll master records.

PAY HEADS
For creating all the compondnts, which form a part of the salary structure of the employees, Pay Head is used. The salary includes Basic, Dearness Allowance(DA), House Rent allowance(HRA), Conveyance, Provident Fund(PF) contribution, Professional tax and so on. These components and their amount may vary from employee to employee.

In order to create a pay head which is an earning to the employee. From the payroll info menu go to Pay Heads -> Create.
Then pay head creation screen will appear where you have to fill up the following informations.

Name : Here you have to give the name of the Earning Pay Head.

Alias : Here enter the other name of the Pay Head, if any.

Pay Head Type : The following Pay Heads are provided by Tally-

• Deduction from Employees : If any amount of money is to be deducted from the salary of the employee.
• Earnings of the Employee : When there is Basic, DA, HRA, Conveyence and so on.
• Employee's Statutory Deduction : It is for the purpose of PF and professional tax, etc.
• Employer's Statutory Contribution : It is for the purpose of PF, ESI, etc.
• Gratuity : For Pay Heads which relate Gratuity.
• Loans and Advances : For employees who has Loans and Advances related to their Pay Heads.
• Reimbursements to Employees : In certain cases Employer provide the expense incurred by the Employee, like Traveling Expenses.
• Not Applicable : In case of 'Salary Payable' Pay Head this is to be selected. It will be used for recording processing of salary.
  

Stages of Payroll Accounting

The Payroll Accounting is done in different stages. The stages are as follows :

Stage 1
Pay Heads Creation
Pay Head means the components of a salary structure. For example- Basic, Dearness Allowance(DA), House Rent Allowance(HRA), Provident Fund(PF), etc.

Stage 2
Recording Details of the employees
From Employee masters, employee details are to be recorded. Employees can also be grouped on the basis of their designation or department.

Stage 3
Defining Salary Structure
The contents of the salary structure and the basis of their computation are defined using the Salary Details option. Salary Details can be set for both grouped employees and individual employees.

Stage 4
Payroll Processing and Generating Payslip
Payroll Voucher is to be entered to record salary processing details. Salary Payslip for all employees also needs to be generated which not only provides the employees attendance but also the earning components and deductions of the employee, and show the net amount paid to him for the pay period.

Details of this Stages will be provided in the next post.

How to set up Payroll Configuration?

For Payroll setup configuration you have to Press F12 and then from there select Payroll Configuration.
After you have selected, the payroll configuration screen appears.

Enter the following details there:

Show statutory details : If you want to maintain the record of
Provident Fund, Employees state insurance and pan details nd print the
same in the payslips then set this option as 'yes'.

Show Passport and Visa details : Set this option 'yes' in order to
display passport and visa details of employees in Export Reports
generated by Tally.

Show contract details : In order to display the contract starting date and expiry date of employees, this option needs to be set to 'yes'.