Perform Payroll Configuration
It is very important to configure payroll module according to your requirements before using it to run payroll in your organization. The payroll configuration module allows you to:
- Configure Reminder to run Payroll in Time
- Configure Approval for Payroll Processing
- Declare Pay Period type to be used
- Declare Pay Periods
- Declare time period to be used
- Setup Investment declaration time period
- Set Monthly Sheet Processing Mode
- Configure Tabs Visibility
To configure payroll module, you need to:
1. Log into the system as Administrator.
The My HR tab displaying your home page appears, as shown in Figure 2-1-1.
2. Rollover mouse on the Settings tab and then select Payroll option from the menu that appears, as shown in Figure 2-1-2.
Alternatively, click on the Settings tab and then click on Payroll section heading, as shown in Figure 2-1-3.
The Payroll Setting page appears, as shown in Figure 2-1-4.
The page displays all the functionalities that you can perform to customize the payroll module according to your requirements.
Help on each functionality can be seen by just clicking on the help icon ( ) next to it. The left navigation bar opens up the Payroll node and displays all the subnodes under it.
3. Click on Payroll Configuration link.
The Payroll Module Setting page of Payroll Configuration functionality appears, as shown in Figure 2-1-5.
The page is already configured with default settings that are used most often.
Configure Reminder to run Payroll in Time
4. Select Send Reminder checkbox and then provide the number of days in the Days Of Reminder field to set the reminder for the HR manager to run the payroll process on the due date, each month.
For example, if you set 3 in Days Of Reminder field and you run payroll process on 30th day of each month then you will get an automatic reminder on 27th of each month reminding you to run payroll in three days.
Configure Approval for Payroll Processing
5. Select Approval Required for Payroll Processing checkbox and then provide the name of the approver in the text field under it.
You can search the name of the approver by clicking Advance Search icon () next to the field.
Setting an approver allows you to get the salary calculations rechecked for any errors by the authorized approver before finalizing it. After the salaries are finalized, you cannot make any changes to them.
Declare Pay Period type to be used
6. Select the frequency on which you want to pay salaries to your employees from Pay Period Type field.
By default system supports three types of pay frequencies, Monthly, Weekly, and Fortnightly.
Declare Pay Periods
7. Click Pay Period Declaration link to generate pay periods for the entire year.
A window that allows you to generate pay periods for the financial year appears, as shown in Figure 2-1-6.
8. Click Add.
The pay periods for the selected pay period type appears for the entire financial year, as shown in Figure 2-1-7.
The icon for a pay period in Actions column shows that the pay period is open for salary calculations. The HR Manager can run payroll only for the open pay periods. You can click on the icon to close an open pay period.
As a best practice, you should always close the pay period after the salary is calculated and is disbursed for a pay period. This saves you from accidentally using the pay period again to calculate salaries.
9. Click cross icon to close the window.
Declare time period to be used
10. Select the time period that you want to use for the payroll module from Time Period dropdown, as shown in Figure 2-1-8.
The system provides you the flexibility of using two types of time periods, Financial and other Time Period. Usually the financial time period is used for financial transactions and it does not necessarily start in January. In India, the financial period starts with 1st April. The time periods are also required by other modules such as Goal settings, Appraisal, and Training. These applications generally follow the calendar year.
So, the flexibility of settings two time periods allows you to use different time periods for different modules.
Setup Investment declaration time period
11. Select the investment declaration processing mode from the Processing Mode field. The available options are:
- Declared: The payroll will be calculated on the declared investment.
- Actual:The payroll will be calculated on the Actual investment
- Ask:The system will ask which processing mode to use before calculating payroll.
- Ignore: The system will ignore investment declarations all together and will calculate tax on the salary.
Employers are required to deduct tax from an employee’s taxable income. This is Tax Deducted at Source (TDS). In order to make the correct TDS calculation from the beginning of the financial year, the employer needs a declaration from the employees about the deductions and exemptions to which they are entitled.
Throughout the year, the tax is deducted on the basis of the information employees provide. One or two months before the financial year ends, the employees need to submit documentary proof of their actual investments in the financial plans that they had declared so that tax adjustments can be made and correct amount of tax can be deducted from their income.
The investment declarations made by employees to allow correct TDS deductions for the employees by the employer from their salaries from the beginning of the financial year is called Declared Investment.
At the end of the financial year, the employees need to submit the documentary proof of the actual investments in the financial plans that they had declared so that tax adjustments can be made and correct amount of tax can be deducted from their income. The investments made by the employees for which they submits the proof is called Actual Investment.
12. Select Investment Declaration checkbox, to use investment declaration functionality in your organization.
If you select this Investment Declaration checkbox. The Investment Declaration Payperiod field appears.
13. Provide the start date of the investment declaration time period in the Start Date field and the end date of the investment declaration time period in the End Date field.
Set Monthly Sheet Processing Mode
14. Select the monthly sheet processing mode for the payroll from MonthlySheet Processing field, as shown in Figure 2-1-9.
The available options are:
- Payroll: This option allows you to adjust monthly sheet variables during the payroll processing.
- Upload: This option allows you to upload the monthly sheet variables through upload functionality to process payroll.
Configure Tabs Visibility
15. Select Show Yearly Details checkbox to display the Year to Date Details tab to the employee.
The Year to Date Details tab displays the payments made to the employee till the today for each month under each salary head, as shown in Figure 2-1-10.
16. Select Show TDS Advice checkbox to display Seek TDS Advice tab to the employee, as shown in Figure 2-1-11.
The Seek TDS advice tab displays the salary amounts paid till date, projected amounts, exemptions and the taxable amounts. The page further details the investments that the employee has made and the exemptions that (s)he can get on that amount, as shown in Figure 2-1-12.