Salary components

Create the earnings, deductions and contributions that make up pay.

Salary components are the building blocks of pay, such as basic, allowances, deductions and employer contributions. Review your defaults flags payroll as Needs attention until you have salary components.

1. Go to Admin → Payroll & statutory and open Salary Components.
2. To start from a catalogue, select Install components and review what is added.
3. To add one yourself, select Create Salary Component.
4. Set its classification (earning, deduction, employer cost, reimbursement and so on) and how it is calculated — fixed, a formula, or depending on another component.
5. Set whether it is included in CTC, gross and net pay, affected by LOP, prorated for attendance, and applicable in Full & Final.
6. Set its PF, ESI, gratuity and tax treatment.
7. Save the draft, then publish it with an effective date.

Tax treatment classifies a component; it does not store a tax rate. Drafts do not change active payroll or employee compensation until published.