HRMS Payroll Management Guide | Ragenaizer Knowledge Base

1 Overview

The Payroll Management module handles everything related to employee compensation - from defining salary components to processing monthly payroll and managing loans.

Payroll Management page showing Salary Components tab with earnings and deductions

Salary Components

Define earnings (Basic, HRA, Allowances) and deductions (PF, Tax, ESI) that make up employee salaries.

Salary Structures

Create salary structures by combining components. Assign structures to employees with CTC-based calculation.

Location Taxes

Configure office-specific taxes like Professional Tax with fixed, percentage, or slab-based rules.

Payroll Drafts

Create monthly payroll drafts, process payslips, review, and finalize before payment.

Finalized Runs

Approve finalized payroll runs, mark as paid, and export bank files for salary disbursement.

Loans & Advances

Manage employee loans with EMI deductions, interest calculations, and repayment tracking.

Arrears Management

Handle salary arrears from backdated structure changes with automatic calculation.

Payroll Adjustments

Create and manage one-time or recurring adjustments like reimbursements, bonuses, incentives, and deductions.

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Prerequisites: Before setting up payroll, ensure you have completed Organization Setup (Offices, Departments, Designations) and created Employees. Payroll requires employees with assigned salary structures.

If You Understand Only 3 Things About Payroll...

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New to payroll? Here's the mental model that will make everything click:

1. CTC = Total Cost to Company

CTC is the total annual amount your company spends on an employee. It includes:

Gross Salary = What employee sees (Basic + Allowances)
Deductions = PF, Tax, etc. (taken from gross)
Net Pay = Gross - Deductions (what's deposited)
Employer Costs = PF contribution, Gratuity (invisible to employee)

Example: ₹12L CTC → ₹1L/month gross → ~₹85K/month net pay

2. Drafts = Safe Playground

Payroll Drafts are your "undo zone" - nothing is permanent until you finalize:

Create Draft → Empty payroll for a month
Process → Calculate all payslips (can redo!)
Review → Check each payslip for errors
Finalize → Lock it forever (no undo!)

Rule: Process as many times as needed, but finalize only once.

3. Proration = Fair Partial Pay

Proration calculates partial salary when someone doesn't work full month:

LOP Days = Leave without pay (absent/unapproved)
Formula = Monthly Pay × (Days Worked ÷ Working Days)
Mid-month joining = Salary from join date only
Transfers = Salary split by location + days

Example: 5 LOP days in 22-day month → Pay × (17÷22) = 77% salary

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Quick Reference Terms:

Basic	Foundation salary (usually 40-50% of gross). Used to calculate HRA, PF.
Gross	Basic + all allowances (HRA, Special, etc.). Total before deductions.
Net	Gross minus deductions. The actual bank transfer amount.
EMI	Equated Monthly Installment. Fixed amount deducted for loan repayment.
YTD	Year-to-Date. Cumulative total from April (financial year start).
Arrears	Backdated salary difference when structure changes retroactively.

2 Payroll Workflow

Understanding the complete payroll workflow is essential for successful monthly processing.

Monthly Payroll Process

Create Draft → Process → Review → Finalize → Approve → Pay

Workflow Steps Explained

Step	Description	Who
1. Create Draft	Create a new payroll draft for a specific month/year and office	HR Admin
2. Process	Calculate payslips for all employees based on attendance, leaves, and deductions	System
3. Review	Review individual payslips, make adjustments if needed, verify totals	HR Admin
4. Finalize	Lock the draft and create a finalized payroll run (cannot be undone)	HR Admin
5. Approve	Management approval of the payroll run before payment	Manager/Admin
6. Pay	Mark as paid with payment reference, generate bank files	HR Admin

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Best Practice: Complete attendance regularization and leave approvals before processing payroll. This ensures accurate working days calculations.

3 Salary Components

Salary components are the building blocks of employee salaries. They are divided into Earnings (money added) and Deductions (money subtracted).

Understanding Component Types

Type	Description	Examples
Earning	Adds to gross salary	Basic Pay, HRA, Special Allowance, Bonus
Deduction	Subtracts from gross salary	PF, Professional Tax, TDS, ESI

Calculation Types

Calculation	Description	Example
Fixed	Same amount every month	Professional Tax = ₹200/month
Percentage of CTC	Calculated as % of annual CTC	Basic = 50% of CTC
Percentage of Basic	Calculated as % of Basic salary	HRA = 40% of Basic, PF = 12% of Basic

Step-by-Step: Creating Salary Components

Step 1: View the Salary Components Tab

Navigate to HRMS → Payroll → Salary Components tab to see existing components:

Salary Components tab showing Earnings and Deductions tables with existing components

Step 2: Click Add Salary Component

Click the "Add Salary Component" button to open the creation modal:

Empty Add Salary Component modal ready for data entry

Step 3: Configure an Earning Component (Basic Pay)

For Basic Pay, use Percentage of CTC calculation:

Configuring Basic Pay as 50% of CTC with "Is Basic Salary" toggle enabled

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Is Basic Salary: Enable this toggle for your Basic Pay component. This marks it as the base for percentage-of-basic calculations (like HRA and PF).

Step 4: Create HRA as Percentage of Basic

For HRA, use Percentage of Basic calculation:

Configuring HRA as 40% of Basic salary

Step 5: View All Components

After creating all required components, your list should look like this:

Complete list of salary components with 5 Earnings and 4 Deductions

Field Descriptions

Field	Required	Description
Component Name	Required	Display name (e.g., "Basic Pay", "House Rent Allowance")
Component Code	Required	Unique code (e.g., "BASIC", "HRA", "PF")
Component Type	Required	Earning or Deduction
Calculation Type	Required	Fixed, Percentage of CTC, or Percentage of Basic
Default Value/Percentage	Optional	Default fixed amount or percentage for this component
Is Basic Salary	Optional	Enable only for Basic Pay - marks it as base for % of basic calculations
Is Taxable	Optional	Whether this component is subject to income tax
Is Statutory	Optional	Whether this is a government-mandated component (PF, ESI)

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Recommended Components:
Earnings: Basic Pay (50% CTC), HRA (40% Basic), Special Allowance (remainder), Conveyance
Deductions: PF Employee (12% Basic), Professional Tax (Fixed), ESI (if applicable)

4 Salary Structures

Salary structures combine multiple components into a template that can be assigned to employees. Each structure calculates salaries based on the employee's CTC (Cost to Company).

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Understanding Component Defaults vs Structure Values

This is a crucial concept for payroll configuration:

Component Default Values: When you create a salary component (e.g., Basic Pay = 40% of CTC), the percentage/amount is a default template value. It's used to pre-fill forms when adding components to structures.
Structure Values (Override): When you add a component to a salary structure, you can override the default. For example, a component with 40% default can be set to 65% in a specific structure.
What Backend Uses: During payslip generation, the structure value is used, NOT the component default. The component default is just a convenience for form pre-filling.

Why This Design Pattern?

This layered approach enables powerful flexibility:

Scenario	How It Works	Example
Same Component, Different Structures	One component can have different values across multiple structures	Basic Pay: 35% for Junior Structure, 50% for Senior Structure
Location-Based Differences	Structures for different offices may have different percentages	HRA: 50% for Mumbai, 40% for Tier-2 cities
Quick Setup	Component defaults auto-fill the form, saving time for common cases	Most structures use Basic at 40%, so 40% is the default
Consistency with Flexibility	Same component definition used everywhere, but values can vary	All use "BASIC" component, but percentages differ per structure

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Best Practice: Set component defaults to your most common values. When creating structures, only change the values that need to differ from the default.

Step-by-Step: Creating a Salary Structure

Step 1: View the Salary Structures Tab

Navigate to Salary Structures tab. Initially it will be empty:

Empty Salary Structures tab before any structures are created

Step 2: Click Create Salary Structure

Empty Create Salary Structure modal

Step 3: Add Components to Structure

Click "Add Component" to add salary components:

Adding components to the salary structure with calculation settings

Step 4: Complete the Structure Configuration

Completed salary structure with all components configured

Step 5: View the Created Structure

Salary structure created successfully and displayed in the list

Structure Versioning

Salary structures support versioning for handling mid-year changes. When you modify a structure, you can create a new version with an effective date.

Viewing Version History

Click the "Version History" button on any salary structure to view all versions with action buttons:

Version History modal showing all versions of a salary structure

Version History showing action buttons: View Details, Compare with Previous, Manage Arrears, and Bulk Assign for each version

Version Details (Snapshot View)

Click "View Details" on any version to see a complete snapshot of the version configuration:

Detailed view of a specific version showing all component configurations

Version snapshot showing effective dates, status, and complete component configuration table with calculation order, percentage of basic, and fixed amounts

The Version Details modal displays:

Version Number: Sequential version identifier (v1, v2, v3, etc.)
Effective From/To: Date range when this version is/was active
Status: Current status (Active, Superseded, or Draft)
Change Reason: Description of why this version was created
Components Table: All salary components with their calculation settings

Comparing Versions

Click "Compare with Previous" to see exactly what changed between two versions:

Version comparison showing added, removed, and modified components between two versions. In this example, 2 components were removed (HRA, PF_EE)

The comparison view highlights:

Section	Description	Color
Added Components	New components in the newer version	Green
Removed Components	Components that were removed	Red
Modified Components	Components with changed percentages or amounts	Yellow/Orange
Unchanged Components	Components that remain the same	Gray

Creating a New Version

When salary components change (e.g., government revises PF percentage), create a new version:

Create New Version modal with effective date and change reason

Bulk Version Assignment

Assign a salary structure version to multiple employees at once, with powerful filtering options:

Bulk Assign modal for assigning structure to multiple employees simultaneously

Bulk Assignment with Filters

Click "Bulk Assign" on any version in the Version History modal to open the advanced assignment interface:

Bulk Assign modal with filter options: Office, Department, Designation dropdowns, Effective From date picker, and Calculate Arrears checkbox

Bulk Assignment Options

Option	Description
Office Filter	Select a specific office to assign only to employees at that location
Department Filter	Filter by department (e.g., Engineering, HR, Finance)
Designation Filter	Filter by job designation/grade
Effective From	Date from which the assignment takes effect
Calculate Arrears	When checked, automatically calculates and creates arrears for retroactive assignments

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Bulk Assignment Use Cases:

Apply annual salary revision to all employees in a department
Assign location-specific structure to all employees at an office
Update structure for specific grade/designation levels
Handle mid-year policy changes with automatic arrears calculation

Preview Salary Calculation

Preview how salaries will be calculated before assigning to employees:

Enter CTC amount to preview salary breakdown

Calculated salary breakdown showing all components, gross, deductions, and net pay

Editing a Structure

Edit Salary Structure modal with existing configuration

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Caution: When editing a structure that has employees assigned, consider creating a new version instead of direct editing. This preserves history and allows for retroactive arrears calculation.

5 Location Taxes

Location Taxes allow you to configure office-specific tax rules like Professional Tax (PT) that vary by state/location.

Understanding Location Taxes

Location taxes are managed through two sub-tabs:

Tax Types: Define the types of taxes (e.g., Professional Tax, State Tax)
Office Tax Rules: Configure specific rules for each office

Step 1: Create Tax Types

First, create the tax types your organization needs:

Empty Location Taxes page showing Tax Types sub-tab

Empty Create Tax Type modal

Creating Professional Tax as a tax type

Professional Tax type created successfully

Step 2: Create Office Tax Rules

Switch to "Office Tax Rules" sub-tab and create rules for each office:

Empty Office Tax Rules sub-tab

Rule Types

Calculation Type	Description	Example
Fixed	Same amount for all employees	PT = ₹200/month
Percentage	Calculated as % of salary	State Tax = 2% of Gross
Slab-Based	Different rates for different salary ranges	PT varies by income slab

Creating a Slab-Based Rule

Configuring a slab-based tax rule with multiple income slabs

Multiple tax slabs configured for Professional Tax

Creating a Fixed Rule

Creating a fixed amount Professional Tax rule

Office Tax Rules list showing configured rules

Tax Preview

Preview how taxes will be calculated for a specific salary:

Tax Preview modal to test calculations

Tax calculation result showing applicable tax amount

Copy Rules Between Offices

Copy tax rules from one office to another:

Copy Tax Rules modal for duplicating rules across offices

6 Payroll Drafts

Payroll Drafts are where you create and process monthly payroll before finalizing. Drafts can be reviewed, modified, and recalculated until you're ready to finalize.

Step-by-Step: Creating and Processing a Payroll Draft

Step 1: View the Drafts Tab

Empty Payroll Drafts tab before any drafts are created

Step 2: Click Create Draft

Create Payroll Draft modal with period and office selection

Using the Month Picker

The Create Draft modal features an HTML5 month picker for easy period selection:

Create Draft modal showing the month picker control allowing quick selection of payroll period (e.g., December 2025)

The month picker provides:

Quick Month Selection: Click to open a calendar-style month/year picker
Keyboard Navigation: Use arrow keys to navigate months
Validation: Prevents selecting future months or already-finalized periods
Format: Displays as "YYYY-MM" but shows friendly format in UI

Step 3: Fill Draft Details

Completed Create Draft form with December 2024, All Offices selected

Step 4: View Created Draft

Draft created successfully with "Pending" status

Step 5: Process the Draft

Click the Process button to calculate all employee payslips:

Confirmation dialog before processing payroll

Step 6: Review Processed Payslips

Draft details showing all calculated employee payslips

Step 7: View Individual Payslip Details

Click the "View Details" button on any employee row to see their complete payslip breakdown:

Individual payslip showing earnings breakdown, deductions, YTD tracking, and net pay

The payslip details modal displays:

Employee Info: Name, payslip period, and net pay summary
Attendance Summary: Working days, days worked, and LOP (Loss of Pay) days
Earnings Table: All earning components with current month amount and Year-to-Date (YTD) totals
Deductions Table: All deduction components with current month amount and YTD totals
Download PDF: Generate and download a formal payslip document

Year-to-Date (YTD) Tracking

Each payslip component displays a YTD column showing the cumulative amount paid for that component from the start of the financial year (April) to the current payslip period:

Column	Description	Example
Component	Name of the salary component	Basic Pay, HRA, Professional Tax
Amount	Amount for the current payslip period	₹20,000
YTD	Cumulative amount from financial year start	₹2,00,000 (10 months × ₹20,000)

YTD Benefits:

Employees can verify their year-to-date earnings for tax planning
HR can quickly verify cumulative deductions like PF and Professional Tax
Useful for generating Form 16 and other statutory reports
YTD resets at the start of each financial year (April)

Step 8: Finalize the Draft

When satisfied with all payslips, finalize the draft:

Confirmation dialog before finalizing - this action cannot be undone

Draft finalized successfully - moved to Finalized Runs

Draft Status Transitions

Payroll drafts have different statuses, and the available actions change based on the current status:

Status: "Not Processed" (Pending)

When a draft is first created, it has no payslips yet. The following actions are available:

Draft in "Not Processed" status showing "Process All" and "Process Selected" buttons

Action	Description
Process All	Calculate payslips for ALL employees in the selected office(s)
Process Selected	Open a modal to select specific employees to process
Rename	Change the draft name for better organization
Delete	Remove the empty draft

Process Selected Employees Modal

Click "Process Selected" to open a modal where you can choose specific employees:

Process Selected Employees modal showing employee list with checkboxes. Select specific employees to process their payslips only.

Use cases for Process Selected:

Testing: Process a few employees first to verify calculations
New Joiners: Process mid-month joiners separately
Corrections: Re-process specific employees after fixing data
Department-wise: Process one department at a time in large organizations

Status: "Processed" (Ready to Finalize)

After processing, the draft shows payslips and different action buttons:

Drafts showing different statuses: "Not Processed" with Process buttons, and "Ready to Finalize" with Recalculate and Finalize buttons

Action	Description
Recalculate	Re-process all payslips after making changes to attendance, adjustments, or salaries
Finalize	Lock the draft and move it to Finalized Runs for approval
Rename	Change the draft name
Delete	Remove the draft and all its payslips

Rename Draft Feature

Click the Rename button to change a draft's name:

Rename Draft modal allowing you to change the draft name for better organization (e.g., "December 2025 - Mumbai Office (Revised)")

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Naming Conventions:

December 2025 - All Offices for company-wide drafts
December 2025 - Mumbai Office for office-specific
Add "(Revised)", "(Corrected)", "(Final)" suffixes as needed

Draft Actions Summary

Action	Description	When to Use
Process All	Calculate payslips for all employees	After creating draft (first-time processing)
Process Selected	Calculate payslips for chosen employees only	Testing, new joiners, corrections
Recalculate	Re-generate all payslips with current data	After attendance corrections, adjustments, or salary changes
Finalize	Lock draft and create finalized run	When ready for approval and payment
Rename	Change draft name	For organization purposes
Delete	Remove draft completely	If draft was created in error

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Important: Once a draft is finalized, it cannot be undone. Always review all payslips carefully before finalizing.

7 Finalized Runs

Finalized Runs are completed payroll periods ready for approval and payment. Once finalized, payslips are locked and cannot be modified.

Step-by-Step: Approving and Paying a Payroll Run

Step 1: View the Finalized Runs Tab

Finalized Runs tab showing completed payroll runs

Step 2: View Run Details

Detailed view of finalized run with all employee payslips

Step 3: Approve the Run

Click Approve to mark the run as approved for payment:

Confirmation dialog for approving payroll run

Payroll run showing "Approved" status

Step 4: Mark as Paid

After disbursing salaries, mark the run as paid:

Mark as Paid modal to enter payment details

Payment details filled with date and reference number

Payroll run showing "Paid" status with payment reference

Run Status Progression

Status	Description	Next Action
Processed	Just finalized, awaiting approval	Approve
Approved	Approved for payment	Mark as Paid
Paid	Salaries disbursed	Complete

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Export Options: Use the Export button to download CSV files for bank transfers or payroll records.

8 Loans & Advances

The Loans & Advances feature allows employees to apply for salary advances or loans that are automatically deducted from their monthly payroll as EMI.

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Loan Lifecycle at a Glance

Applied → Approved → Disbursed → Active (EMI) → Closed

Applied	Employee submits loan request → appears in "Pending" queue
Approved	HR Admin reviews and approves → EMI schedule generated
Disbursed	HR marks as disbursed with reference number → funds released
Active	EMI auto-deducted each payroll → balance reduces monthly
Closed	Final EMI paid → loan marked complete automatically

Key Decision: Rejected loans can be re-applied. Closed loans cannot be reopened.

Understanding Loan Types

Loan Type	Description	Interest
Salary Advance	Short-term advance against upcoming salary	Usually interest-free
Personal Loan	Longer-term loan with EMI repayment	May include interest
Emergency Loan	Quick disbursement for emergencies	May be interest-free

Step-by-Step: Complete Loan Lifecycle

Step 1: View the Loans Tab

Empty Loans & Advances tab before any loans are created

Filtering Loans by Status

The Loans tab includes a status filter dropdown to quickly view loans in different stages:

Loans tab showing the status filter dropdown with options: All Status, Active, Pending, and Completed

Filter Option	Shows
All Status	All loans regardless of status
Active	Disbursed loans with ongoing EMI deductions
Pending	Loan applications awaiting HR approval
Completed	Fully repaid loans (all EMIs paid)

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Quick Access:

Filter by Pending to review loan applications needing approval
Filter by Active to monitor ongoing loan repayments
The count badge on each filter shows how many loans match that status

Step 2: Apply for a Loan

Click "Apply for Loan" to open the application modal:

Empty Apply for Loan modal

Completed loan application with amount, tenure, and details

Step 3: View Pending Loan

Loan application showing "Pending" status in the list

Step 4: View Loan Details

Loan details modal showing repayment schedule and terms

Step 5: Approve the Loan (HR Admin)

Confirmation dialog for approving loan application

Loan showing "Approved" status after approval

Step 6: Disburse the Loan

After approval, disburse the loan to the employee:

Disburse Loan modal for entering payment details

Disbursement details with payment mode and reference number

Loan showing "Active" status after disbursement

Step 7: EMI Deduction in Payroll

Once active, the loan EMI is automatically deducted from monthly payroll:

January payroll showing employee with loan EMI deduction (lower net pay)

Payslip details showing Loan EMI of ₹5,208 as a deduction

Loan Status Progression

Status	Description	Next Action
Pending	Application submitted, awaiting HR review	Approve or Reject
Approved	Approved by HR, awaiting disbursement	Disburse
Active	Loan disbursed, EMI being deducted monthly	Automatic EMI
Completed	All EMIs paid, loan closed	None
Rejected	Application rejected by HR	None

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Automatic EMI: Once a loan is active, the EMI is automatically added as a deduction to the employee's monthly payslip. No manual intervention required.

9 Arrears Management

Arrears are salary differences that arise when salary changes are applied retroactively. The system automatically calculates arrears when you create a salary structure version with a past effective date.

Arrears Lifecycle Summary

Before diving into details, here's the complete arrears workflow at a glance:

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1. Trigger Event

Salary revision or structure version created with retroactive effective date

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2. Auto-Calculate

System calculates daily differences for each affected month

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3. Pending Review

Arrears appear in Arrears tab with "Pending" status

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4. Apply/Cancel

HR applies arrears to next payroll or cancels with reason

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5. Paid

Arrears added to payslip as line item when payroll runs

Status	What It Means	What You Can Do
Pending	Arrears calculated but not yet included in payroll	Review details, Apply, or Cancel
Applied	Arrears queued for next payroll run	View only (will be in next payslip)
Cancelled	Arrears voided (will not be paid)	View only (audit trail preserved)

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Two Types of Arrears:

Version Arrears: When salary structure changes retroactively (affects multiple employees)
CTC Revision Arrears: When individual employee's CTC is revised with past date

Understanding Arrears

Arrears occur when:

A salary structure is changed with a past effective date
A salary increment is announced retroactively
A new component is added with backdated effect
An employee's CTC is revised with a past effective date

Arrears Tab Structure

The Arrears section is organized into two tabs for different types of arrears:

Arrears section showing the two-tab structure: "Version Arrears" (for structure changes) and "CTC Revision" (for individual salary revisions)

Tab 1: Version Arrears

Version Arrears are generated when a salary structure version is created with a retroactive effective date. These affect multiple employees who use the same structure.

Trigger: Creating a new version of a salary structure with a past date
Scope: All employees assigned to that structure
Example: Government revises PF percentage effective April 1st (announced in July)

Tab 2: CTC Revision Arrears

CTC Revision Arrears are generated when an individual employee's CTC is revised with a retroactive effective date.

CTC Revision tab showing individual employee arrears from salary revisions. Each row shows the employee, revision date, old CTC, new CTC, affected months, and calculated arrears amount.

Trigger: Creating a salary revision with a past effective date
Scope: Individual employee only
Example: Promotion announced in December, effective from October

CTC Revision Arrears Details

Column	Description
Employee	Employee name and code
Revision Date	When the salary revision was created
Effective From	The retroactive date from which the revision applies
Old CTC	Previous annual CTC
New CTC	Revised annual CTC
Months Affected	Number of past months requiring arrears calculation
Total Arrears	Sum of arrears for all affected months
Status	Pending, Applied, or Cancelled

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CTC Revision Workflow:

Go to Employee Salaries → Select employee → Click "Revise Salary"
Enter new CTC and set "Effective From" to a past date
System automatically calculates arrears for each affected month
Navigate to Arrears → CTC Revision tab to review
Apply arrears to include in the next payroll

Step-by-Step: Creating Version-Based Retroactive Arrears

Step 1: View the Arrears Tab

Empty Arrears tab when no arrears exist

Step 2: Create a Version with Retroactive Date

In Salary Structures, create a new version with a past effective date:

Version History showing existing version (v1)

Creating a new version with retroactive effective date

New version with increased Basic Pay (55%) effective November 1, 2025

Version History showing both v1 and v2

Step 3: Manage Arrears

Click "Manage Arrears" to see calculated arrears for affected employees:

Version Arrears Management modal showing "No arrears found"

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Why does the modal show "No arrears found"?
Arrears are only calculated when payslips already exist for the retroactive period. The system compares:

Old Gross: What was paid in the existing payslip
New Gross: What should have been paid with the new structure version

If payroll was not yet processed for the affected months (e.g., November 2025), there are no payslips to compare against, so no arrears are generated. Process payroll for those months first, then create the retroactive version to generate arrears.

Arrears with Pending Status

When payslips exist for the retroactive period, the modal displays pending arrears that can be applied to the next payroll:

Arrears tab showing 6 applied arrears for 3 employees (Praveen Babu, Dev Kumar, Aradhna Pal) totaling ₹2,32,145. Each row shows the employee name, structure version, period (Nov 2025), old gross (₹23,636 or ₹30,909), new gross (₹65,000), and arrears amount.

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Workflow for Retroactive Arrears:

Process payroll for the months you want to affect (e.g., November)
Create a new structure version with a retroactive effective date (e.g., November 1st)
Click "Manage Arrears" - the system will show pending arrears comparing old vs new gross
Select arrears and click "Apply Selected to Payroll" to include in the next payroll run

Arrears Calculation

Element	Description
Old Salary	What was paid based on previous structure version
New Salary	What should have been paid with new structure version
Difference	Arrear amount = New Salary - Old Salary
Affected Months	All months between effective date and current date

Arrears Actions

Action	Description
Apply	Add arrear amount to next payroll
Cancel	Mark arrear as not applicable
Bulk Apply	Apply multiple arrears at once

Viewing and Filtering Arrears

The Arrears tab provides a comprehensive view of all arrears with filtering options:

Status Filter

Use the status dropdown to filter arrears by their current state:

Pending: Arrears waiting to be applied to payroll
Applied: Arrears that have been included in a payslip
Cancelled: Arrears that were marked as not applicable
All Statuses: View all arrears regardless of status

Arrears tab filtered to show only applied arrears with summary statistics

Summary Statistics

Statistic	Description
Total Records	Number of arrears matching the current filter
Total Amount	Sum of all arrears amounts in the filtered list
Employees Affected	Number of unique employees with arrears

Arrears in Payslips

When viewing a payslip that includes arrears, the system displays both the total arrears amount and a detailed breakdown by period for audit and compliance purposes.

Combined Totals Section

In the payslip modal, the "Combined Totals" section shows:

Arrears Total: The total arrears amount added to this payslip
Arrears by Period (Audit): A detailed table showing the breakdown

Payslip showing arrears breakdown by period for audit compliance

Period Breakdown Table

Column	Description
Period	The month and year the arrear applies to (e.g., "November 2025")
Old Gross	What was originally calculated/paid for that period
New Gross	What should have been paid with the new structure
Arrears	The difference amount (New - Old) for that specific period

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Audit Trail: The period-wise breakdown provides a complete audit trail showing exactly which months were affected and how the arrears were calculated. This is essential for tax compliance and financial audits.

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Automatic Calculation: Arrears are automatically calculated when you create a structure version with a past effective date. The system compares what was paid vs what should have been paid for each affected month.

CTC Revision Arrears (Individual Salary Changes)

In addition to structure version arrears (which affect multiple employees), the system also calculates arrears when an individual employee's CTC is revised with a backdated effective date.

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Key Difference: CTC Revision Arrears are triggered by individual salary changes (e.g., annual increments, promotions) while Structure Version Arrears are triggered by changes to the salary structure components (e.g., increasing BASIC from 40% to 45%).

How CTC Revision Arrears Work

Navigate to Employee Salary: Go to Employees → Select Employee → Salary Tab
Revise Salary: Click "Revise Salary" and enter new CTC with a backdated effective date
Automatic Calculation: System automatically identifies affected payslips and calculates arrears
Review Arrears: View pending arrears in Payroll → Arrears tab

Viewing CTC Revision Arrears

After revising salary with a backdated effective date, the arrears appear in the Arrears tab:

Arrears tab showing 2 pending CTC revision arrears for Dev Kumar (EMP002). November 2025: ₹9,091 arrears. December 2025: ₹13,939 arrears. Total: ₹23,030.

Arrears Details View

Click "View Details" on any arrears row to see the complete calculation breakdown:

Arrears details modal showing calculation breakdown: Old Gross ₹23,636 → New Gross ₹90,909 = ₹9,091 arrears for November 2025. Component-wise breakdown shows individual differences for PF, HRA, etc.

CTC Revision Arrears Calculation

The system uses payslip-confirmed attendance (actual days worked from processed payslips) for accurate arrears calculation:

Month	Days Worked	Old Gross	New Gross	Arrears
November 2025	15 days	₹23,636	₹90,909	+₹9,091
December 2025	23 days	₹30,909	₹1,39,394	+₹13,939
Total CTC Revision Arrears				+₹23,030

⚠️

Attendance Accuracy: CTC Revision Arrears use the days_worked field from already-processed payslips, NOT calendar working days. This ensures arrears are accurate even when employees had partial attendance (LOP, leaves, etc.).

Arrears Source Types

The system tracks different types of arrears for audit purposes:

Source Type	Trigger	Scope
`structure_version`	Salary structure version change	Multiple employees on structure
`ctc_revision`	Individual CTC revision	Single employee
`transfer`	Office transfer affecting salary	Single employee

10 Payroll Adjustments

Payroll Adjustments allow HR administrators to add one-time or recurring additions and deductions to employee salaries. This covers reimbursements, bonuses, incentives, recovery deductions, and other ad-hoc adjustments that need to be reflected in payslips.

ⓘ

Key Concepts

Adjustment Types - Different categories: Reimbursement, Bonus, Incentive, Arrears, Deduction, Recovery
Effect Types - Whether the adjustment adds to salary (earning) or subtracts (deduction)
Recurring Adjustments - Adjustments that repeat for multiple months automatically
Approval Workflow - All adjustments require HR Admin approval before being applied

10.1 Understanding Adjustment Types

The system supports six different types of adjustments, each serving a specific purpose:

Type	Effect	Description	Common Use Cases
`reimbursement`	+ Earning	Expense reimbursements for approved claims	Travel expenses, medical bills, equipment purchases
`bonus`	+ Earning	One-time bonus payments	Performance bonus, festive bonus, referral bonus
`incentive`	+ Earning	Performance-based incentives (often recurring)	Sales incentive, quarterly targets, project completion bonus
`arrears`	+ Earning	Backdated salary differences	Salary revision arrears, promotion arrears
`deduction`	− Deduction	General deductions from salary	Damage charges, policy violations, advance recovery
`recovery`	− Deduction	Recovery of overpayments or advances	Salary overpayment recovery, unauthorized expense recovery

10.2 Navigating to Adjustments Tab

The Adjustments tab is accessible from the Payroll Management page. Navigate to HRMS → Payroll → Adjustments tab.

Adjustments tab showing empty state with no adjustments created yet. Use the "New Adjustment" button to create your first adjustment.

10.3 Creating a Reimbursement Adjustment

Reimbursements are used to reimburse employees for approved expense claims. Follow these steps to create a reimbursement:

Click the "New Adjustment" button in the Adjustments tab
Select the employee from the dropdown
Choose "Reimbursement" as the adjustment type
Enter the reimbursement amount
Select the month and year for when this should be applied
Add a description explaining the reimbursement
Click "Create Adjustment"

New Adjustment modal showing all available fields. The Employee dropdown, Adjustment Type, Amount, Month/Year, and Description are required fields.

Employee dropdown showing all active employees. Select the employee who should receive this adjustment.

Reimbursement adjustment filled out for Praveen Babu - ₹5,000 for travel expense reimbursement in January 2026.

After creation, the reimbursement appears in the table with "Pending" status, awaiting HR Admin approval.

10.4 Creating a Bonus Adjustment

Bonus adjustments are one-time payments for exceptional performance, referrals, or other achievements.

Bonus adjustment for Dev Kumar - ₹15,000 performance bonus. Note how the type is set to "Bonus" which automatically sets the effect to "Earning".

Both adjustments now visible in the table - the Reimbursement for EMP001 and Bonus for EMP002, both pending approval.

10.5 Creating a Recurring Incentive

Incentives can be set as recurring to automatically repeat for multiple months. This is useful for quarterly incentive programs or ongoing performance bonuses.

💡

Recurring Adjustments
When you set the "Recurring Months" field to a value greater than 0, the system will automatically apply this adjustment for the specified number of consecutive months starting from the selected month/year.

Incentive for Aradhna Pal - ₹3,000 monthly sales incentive set to recur for 3 months. The "Recurring Months" field is set to 3.

The incentive now shows in the table. Note the recurring indicator showing it will apply for 3 months.

10.6 Creating a Recovery Deduction

Recovery adjustments are used to deduct amounts from employee salaries, typically for recovering overpayments, advances, or damages.

⚠

Deduction Types
Both "Deduction" and "Recovery" types subtract from the employee's salary. Use "Recovery" specifically when recovering previously paid amounts, and "Deduction" for penalties or other charges.

Recovery adjustment for Dev Kumar - ₹2,000 to recover an overpayment. The effect type is automatically set to "Deduction" for recovery types.

All four adjustments created and visible in the table. The Recovery shows the amount in red indicating it's a deduction. All are in "Pending" status.

10.7 Viewing Adjustment Details

Click the View Details button (eye icon) on any adjustment to see complete information including who created it and when.

View Details modal showing complete information about the adjustment including employee name, type, amount, description, status, and audit information.

10.8 Approving Adjustments

All adjustments require HR Admin approval before they are applied to payslips. Only users with HRMS_HR_ADMIN or SUPERADMIN role can approve adjustments.

Click the View Details button on a pending adjustment
Review the adjustment details carefully
Click the "Approve" button to approve
Confirm the approval in the dialog

View Details modal for a pending adjustment showing Approve and Reject buttons. HR Admin must verify the details before approving.

Confirmation dialog asking to confirm the approval. Click "Approve" to proceed or "Cancel" to go back.

After approval, the adjustment status changes to "Approved" (shown in green). The approved adjustment will be included in the next payroll processing.

10.9 Rejecting Adjustments

If an adjustment request is incorrect or not approved, you can reject it with a reason.

Click the View Details button on a pending adjustment
Click the "Reject" button
Enter a rejection reason (required)
Click "Reject" to confirm

Reject modal showing the required reason field. You must provide a reason for rejecting the adjustment.

Reject modal with reason filled in - "Overpayment was already recovered in previous month. Duplicate entry."

After rejection, the adjustment status changes to "Rejected" (shown in red). The rejection reason is stored for audit purposes.

Final state showing all adjustments processed - 3 approved (Reimbursement, Bonus, Incentive) and 1 rejected (Recovery). Filter options allow viewing by status.

10.10 Adjustments in Payroll Processing

Approved adjustments are automatically included when processing payroll drafts. Here's how adjustments appear in the payroll workflow:

Step 1: Create and Process Payroll Draft

Navigate to the Payroll Drafts tab. If no drafts exist for the current period, you'll see an empty state.

Create Draft modal - select the month, year, and optionally filter by office. Click "Create Draft" to create a new payroll draft.

Draft created successfully. Click "View Details" to see the draft, then "Process" to generate payslips with adjustments included.

Step 2: View Adjustments in Payslips

After processing the draft, open any payslip to see how adjustments are reflected. Adjustments appear in a dedicated "Adjustments & Additions" section.

Praveen Babu's (EMP001) payslip showing the ₹5,000 Reimbursement in the "Adjustments & Additions" section. This adds to the net pay.

Dev Kumar's (EMP002) payslip showing the ₹15,000 Bonus as "Bonus/Incentive" in the Adjustments section. Net Impact shows +₹15,000.

Aradhna Pal's (EMP003) payslip showing the ₹3,000 Incentive. Since this is a recurring adjustment, it will appear for the next 2 months as well.

Understanding the Payslip Adjustments Section

The "Adjustments & Additions" section in payslips shows:

Additional Earnings - Reimbursements, Bonuses, Incentives, and Arrears that add to salary
Additional Deductions - Recovery and Deduction amounts that subtract from salary
Net Impact - The total effect of all adjustments on the employee's net pay

Adjustment Type	Display Name in Payslip	Color Badge
Reimbursement	Reimbursement	Green
Bonus / Incentive	Bonus/Incentive	Purple
Arrears	Arrears	Orange
Deduction / Recovery	Recovery	Red

10.11 Adjustment Status Workflow

Every adjustment goes through a defined workflow:

Created → Pending → Approved / Rejected → Applied in Payroll

Status	Description	Actions Available
Pending	Adjustment created, awaiting HR Admin approval	View, Approve, Reject
Approved	Approved by HR Admin, will be included in payroll	View only
Rejected	Rejected by HR Admin, will not be applied	View only (with rejection reason)
Applied	Successfully applied in a finalized payroll run	View only

10.12 Best Practices

💡

Tips for Managing Adjustments

Always add descriptions - Include detailed reasons for adjustments for audit purposes
Review before approval - Verify the amount, employee, and month before approving
Use recurring for regular incentives - Set recurring months for quarterly bonuses or ongoing incentives
Process adjustments before payroll - Ensure all pending adjustments are approved/rejected before processing payroll drafts
Check payslips after processing - Verify adjustments appear correctly in the payslip preview

⚠

Common Mistakes to Avoid

Wrong month selection - Ensure the month/year matches when the adjustment should apply
Duplicate adjustments - Check if a similar adjustment already exists before creating
Missing approvals - Unapproved adjustments won't appear in payroll
Wrong adjustment type - Using "Deduction" instead of "Recovery" affects reporting

11 Voluntary Deductions

Voluntary Deductions (VD) allow employees to opt into recurring deductions from their salary for benefits like additional insurance, charity donations, or other voluntary contributions. This section covers how to set up VD types, manage enrollments, and track deductions in payslips.

Voluntary Deductions Lifecycle Summary

Before diving into details, here's how voluntary deductions work from enrollment to deduction:

📝

1. HR Creates VD Type

Define deduction name, default amount, and description

→

🙋

2. Employee Enrolls

Employee opts in via self-service or HR enrolls them

→

⏳

3. Pending Approval

Enrollment awaits HR approval

→

✅

4. Approved → Active

HR approves, deduction becomes active

→

💰

5. Monthly Deduction

Amount auto-deducted in each payroll run

Status	What It Means	What You Can Do
Pending Approval	Enrollment submitted, awaiting HR review	HR: Approve or Reject
Approved	HR approved but not yet active (future start date)	Will activate on effective date
Active	Deducted from payroll each month	Employee: Opt Out; HR: Modify amount
Opted Out	Employee stopped the deduction	Employee: Re-enroll if needed
Rejected	HR rejected the enrollment	Employee: Re-apply with corrections

💡

Employee-Controlled: Unlike mandatory deductions (PF, ESI), voluntary deductions are entirely employee-initiated. They can opt in, modify amounts (within limits), and opt out at any time.

ⓘ

Key Concepts

VD Types - Define the categories of voluntary deductions available (e.g., Medical Insurance, Charity)
Enrollments - Track which employees are enrolled in which VD types
Status Workflow - Pending Approval → Approved → Active → Opted Out

11.1 VD Types Tab

The VD Types tab allows HR administrators to create and manage the types of voluntary deductions available to employees.

VD Types tab showing existing deduction types with their default amounts

Creating a VD Type

Navigate to Payroll → Voluntary Deductions → VD Types tab
Click the "Create VD Type" button
Fill in the VD type details
Click "Create" to save

Empty Create VD Type modal showing required fields

Create VD Type modal filled with "Charity Donation" example - ₹1,000 default amount

Field	Required	Description
`Deduction Name`	Required	A descriptive name for the VD type (e.g., "Additional Medical Insurance")
`Default Amount`	Required	The default monthly deduction amount. Can be overridden per enrollment.
`Description`	Optional	Additional details about the deduction for employee reference

Editing a VD Type

Click the Edit button next to any VD type to modify its details.

Edit VD Type modal showing existing values for modification

⚠

Changing Default Amount
Changing the default amount on a VD type does NOT affect existing enrollments. Only new enrollments will use the updated default.

11.2 All Enrollments Tab

The All Enrollments tab shows all VD enrollments across employees with their current status and allows HR to manage them.

All Enrollments tab showing summary statistics (5 Active, 0 Pending, ₹15,000 Monthly VD) and enrollment list

Understanding Status Badges

Status	Color	Description
Pending Approval	Yellow	Employee has applied; awaiting HR approval
Approved	Blue	HR has approved; will become active on start date
Active	Green	Currently being deducted from payroll
Opted Out	Gray	Employee has opted out; no longer active
Rejected	Red	HR rejected the enrollment request

Filtering Enrollments

Use the dropdown filters to narrow down the enrollment list:

Status filter dropdown showing all available filter options

Enrollments filtered to show only "Opted Out" entries - useful for tracking historical enrollments

11.3 Creating a New Enrollment (HR Admin)

HR administrators can create enrollments on behalf of employees. When created by HR, enrollments go directly to Active status.

Navigate to Payroll → Voluntary Deductions → All Enrollments tab
Click the "New Enrollment" button
Select the employee from the dropdown
Select the VD type (amount auto-fills with default)
Adjust the monthly amount if needed
Set the start date (and optionally an end date)
Click "Submit for Approval"

Empty New Enrollment modal showing employee and VD type dropdowns

Filled enrollment modal - selecting employee, VD type auto-populates the default amount

Field	Required	Description
`Employee`	Required	Select the employee to enroll in the VD
`Deduction Type`	Required	Select the VD type - default amount auto-fills
`Monthly Amount`	Required	The amount to deduct monthly (can differ from default)
`Start Date`	Required	When deductions should begin
`End Date`	Optional	Leave blank for ongoing deductions; set for fixed-term

💡

HR vs Employee Enrollments

HR-created enrollments go directly to Active status
Employee self-enrollments go to Pending Approval status first

11.4 Viewing Enrollment Details

Click the View Details button on any enrollment to see complete information.

Enrollment details showing employee info, VD type, amount, dates, status, and who approved it

The details modal shows:

Employee Name & Code - Who is enrolled
VD Type - The deduction category
Monthly Amount - Amount being deducted
Start/End Dates - When deductions apply
Status - Current enrollment status
Approved By - Which HR admin approved (if applicable)

11.5 Opting Out of a VD

Active enrollments can be opted out by clicking the Opt-Out button. This ends the deduction from the specified date.

Find the active enrollment in the list
Click the "Opt-Out" button
Set the Last Deduction Date (defaults to today)
Click "Confirm Opt-Out"

Opt-Out confirmation modal showing the employee, VD type, and last deduction date field

⚠

Prorated Deductions
If the last deduction date is mid-month, the final month's deduction will be prorated based on the number of days enrolled.

11.6 Deleting an Enrollment

In some cases, you may need to completely delete an enrollment rather than opting out. The delete option is available for enrollments that have not yet been processed in any payroll.

When Can You Delete an Enrollment?

Enrollment Status	End Date	Can Delete?	Alternative Action
Pending Approval	Any	Yes	—
Approved	Any	Yes	—
Rejected	Any	Yes	—
Active	Has end date	Yes (if not processed)	Use Opt-Out if already processed
Active	Ongoing (no end date)	No	Use Opt-Out button instead
Opted Out	Any	No	Already terminated

How to Delete an Enrollment

Find the enrollment in the list (must have a defined end date for active enrollments)
Click the Delete button (trash icon)
A confirmation dialog will appear asking you to confirm the deletion
Click "Confirm" to permanently delete the enrollment

⚠

Cannot Delete Processed Enrollments
If the enrollment has already been processed in a payroll run (i.e., the deduction appeared on a payslip), you will see an error: "Cannot delete this enrollment because it has already been processed in payroll. Use 'Opt-Out' to stop future deductions instead."

💡

Delete vs Opt-Out

Delete - Completely removes the enrollment as if it never existed. Only for unprocessed enrollments.
Opt-Out - Ends the enrollment from a specific date. The history is preserved and shows "Opted Out" status.

11.7 VD in Payslips

Voluntary deductions appear as line items in the Deductions section of employee payslips.

Payslip showing "Additional Medical Insurance ₹2,500" as a deduction line item alongside other deductions like PT and Loan EMI

In the payslip above, you can see:

Earnings: Basic Pay ₹55,000, Special Allowance ₹10,000
Deductions:
- Professional Tax: ₹200
- Loan EMI: ₹5,208
- Additional Medical Insurance: ₹2,500 (VD)
Net Pay: ₹57,092

11.8 Complete VD Workflow

The complete lifecycle of a voluntary deduction:

Create VD Type
HR creates deduction categories

→

Enroll Employee
HR creates or employee applies

→

Approval
HR approves (if employee-initiated)

→

Active
Deducted in monthly payroll

→

Opt-Out
Employee/HR ends enrollment

💡

Best Practices

Create VD types before the payroll period you want them to apply
Set clear start dates to ensure deductions begin in the correct payroll run
Use the end date field for temporary deductions (e.g., 6-month insurance plans)
Regularly review "Pending Approval" enrollments to ensure timely processing

12 Salary Reports Dashboard (HR Admin)

The Salary Reports Dashboard provides HR administrators with comprehensive analytics and summary views of the organization's salary data. These reports help with budgeting, compliance reporting, and salary audits.

🔒

Authorization Required

Salary reports contain sensitive compensation data. Access is restricted to users with HRMS_HR_ADMIN, HRMS_ADMIN, or SUPERADMIN roles.

Salary Reports Dashboard Overview

Access the Salary Reports Dashboard by clicking "Salary Reports" button in the Payroll section:

Salary Reports Dashboard showing summary cards (Total Employees, Total CTC, Monthly Gross, Average CTC), department breakdown, and detailed employee salary table with export options

Dashboard Components

Component	Description
Summary Cards	Quick metrics at a glance: Total Employees with Salary, Total Annual CTC, Total Monthly Gross, Average CTC
Department Breakdown	Visual breakdown of salary distribution by department with percentages
Employee Salary Table	Detailed list of all employees with their CTC, monthly gross, structure name, and effective date
Filter Options	Filter by department and/or office to narrow down the data
Export Buttons	Export data as CSV or PDF for external reporting

💡

Dashboard Use Cases:

Budget Planning: View total salary expenses for fiscal year planning
Department Comparison: Compare salary distribution across departments
Audit Compliance: Export detailed salary data for compliance audits
Identify Gaps: "Employees Without Salary" metric highlights incomplete records

12.1 Using Filter Options

The dashboard provides filter dropdowns to narrow down salary data by department or office.

How to Filter Data

Click the Office dropdown to filter by a specific office location
Click the Department dropdown to filter by a specific department
The dashboard automatically updates to show filtered results
Summary cards, department breakdown, and employee table all reflect the current filter

Understanding the Summary Cards

Card	Description
Total Employees	Count of active employees with salary assigned (matching current filters)
Total Annual CTC	Sum of annual CTC for all employees in the filtered view
Monthly Gross	Sum of monthly gross salary for all employees
Average CTC	Average annual CTC per employee (Total CTC ÷ Employee count)

12.2 Department Breakdown

The department breakdown section shows how salary costs are distributed across departments.

What You Can See

Department Name: Each department in your organization
Employee Count: Number of employees in that department
Percentage: What portion of total salary goes to this department

💡

Use Case: Budget Planning

Use the department breakdown at the start of each fiscal year to understand salary distribution. Identify departments with high costs for budget optimization discussions.

12.3 Employee Salary Table

The detailed employee table shows individual salary information for each employee.

Table Columns

Column	Description
Employee	Employee name and code
Department	Employee's current department
Annual CTC	Total Cost to Company per year
Monthly Gross	Monthly gross salary before deductions
Structure	Name of the salary structure assigned
Effective From	Date when current salary became effective

12.4 Exporting Reports

Export salary data for external analysis, compliance audits, or sharing with stakeholders.

How to Export

Apply any filters you need (office, department)
Click the Export CSV button to download data as a spreadsheet
Click the Export PDF button to download a formatted report

Export Formats

Format	Best For
CSV	Data analysis in Excel, importing to other systems, detailed manipulation
PDF	Formal reports, sharing with management, compliance documentation

💡

Best Practices for Reports

Run reports monthly to track salary expense trends
Use department filters for department-head salary reviews
Export PDF reports for board presentations
Export CSV for detailed analysis or audit purposes

13 Advanced Draft Features (HR Admin)

Beyond basic draft processing, the payroll system provides advanced features for partial processing, draft organization, and detailed payslip inspection.

13.1 Process Selected Employees Only

Instead of processing the entire draft at once, you can selectively process payslips for specific employees. This is useful for:

Testing payroll calculations for a few employees before full processing
Re-processing specific employees after corrections
Handling employees who joined mid-month separately
Processing department-by-department in large organizations

How to Process Selected Employees

Navigate to Payroll → Payroll Drafts tab
Find your draft (must be in "Not Processed" or "Processed" status)
Click the Process Selected button
In the modal, select the employees you want to process using checkboxes
Use the search box to find specific employees by name or code
Click Process Selected to generate payslips only for chosen employees

Process Selected Employees Modal

Process Selected Employees modal - Select specific employees to process, with search and selection counter

Modal Features

Feature	Description
Search Box	Filter employees by name or employee code
Select All	Checkbox to select/deselect all visible employees
Selection Counter	Shows how many employees are currently selected (e.g., "3 selected")
Employee List	Checkboxes for each employee showing name, code, and department

💡

Incremental Processing

You can use Process Selected multiple times on the same draft. Each time, only employees who don't already have a payslip will be processed. Already-processed employees are automatically skipped.

13.2 Rename Draft

Change the name of a draft for better organization, especially when managing multiple drafts across different offices or purposes.

How to Rename a Draft

Navigate to Payroll → Payroll Drafts tab
Find the draft you want to rename in the drafts table
Click the Rename button (pencil icon) in the Actions column
Enter the new name in the rename dialog
Click Rename to save the new name

Rename Draft Dialog

The rename dialog provides a simple input field to update the draft name:

Rename Draft dialog - Enter a new descriptive name for the draft

ⓘ

Draft Naming Conventions

Consider using consistent naming patterns:

December 2024 - All Offices for company-wide drafts
December 2024 - Mumbai Office for office-specific drafts
December 2024 - Engineering Team for department-specific processing
Add "(Revised)", "(Corrected)", "(Final)" suffixes as needed

13.3 Viewing Draft Payslip Details

Before finalizing a draft, you can inspect individual payslips to verify calculations and review all earnings and deductions.

How to View Payslip Details

Navigate to Payroll → Payroll Drafts tab
Click on a processed draft to expand and see its payslips
Click the View button (eye icon) on any payslip row
The payslip details modal will show complete breakdown

Payslip Details Modal

The payslip modal displays comprehensive information:

Section	Information Displayed
Header	Employee name, code, pay period (month/year)
Attendance Summary	Working days, days worked, LOP days
Earnings	List of all earning components (Basic, HRA, Allowances) with amounts
Deductions	List of all deduction components (PF, PT, ESI, Loans) with amounts
Summary	Gross Earnings, Total Deductions, Net Pay
YTD (Year-to-Date)	Cumulative amounts for each component for the financial year

Draft vs Finalized Payslips

Status	Can Modify?	Location
Draft	Yes - can recalculate or delete the entire draft	Payroll Drafts tab
Finalized	No - locked for audit purposes	Finalized Runs tab

13.4 Draft Recalculation

Recalculate all payslips in a draft after making changes to salary structures, adjustments, or attendance data.

How to Recalculate a Draft

Navigate to Payroll → Payroll Drafts tab
Find your processed draft in the table
Click the Recalculate button (refresh icon)
Confirm the recalculation when prompted
Wait for the system to regenerate all payslips
Review the changes summary that appears

When to Recalculate

Scenario	Why Recalculate
Salary Adjustments Approved	Newly approved adjustments need to be included in payslips
Attendance/LOP Corrected	Updated attendance affects salary proration
Structure Version Changed	Component percentages or amounts have changed
CTC Arrears Applied	Arrears need to be added to affected payslips
Loan Disbursed	New EMI deduction needs to be included

Changes Summary

After recalculation, the system displays a summary showing:

Total Recalculated: Number of payslips regenerated
Changes Detected: Number of payslips with amount differences
Updated Totals: New gross, deductions, and net pay totals

⚠

Recalculation Overwrites

Recalculation regenerates all payslip amounts from scratch based on current data. Any manual overrides or corrections made to individual payslips will be lost. Make manual corrections after the final recalculation.

13.5 Delete Draft

Remove a draft and all its associated payslips. Only drafts in "Not Processed" or "Processed" status can be deleted.

How to Delete a Draft

Navigate to Payroll → Payroll Drafts tab
Find the draft you want to delete in the table
Click the Delete button (trash icon) in the Actions column
A confirmation dialog will appear asking you to confirm the deletion
Click Delete to permanently remove the draft

Delete Restrictions

Draft Status	Can Delete?	Alternative Action
Not Processed	Yes	-
Processed	Yes	-
Finalized	No	View in Finalized Runs

⚠

Deletion is Permanent

Deleted drafts cannot be recovered. All payslips generated within the draft will also be permanently deleted. Always ensure you want to discard the draft before confirming deletion.

💡

When to Delete a Draft

Draft was created with incorrect month/year settings
Major data errors require starting fresh
Test draft that's no longer needed
Duplicate draft created by mistake

14 Loan Monitoring (HR Admin)

Track and manage employee loans throughout their lifecycle, from application to full repayment.

14.1 Active Loans Dashboard

View and monitor all currently active loans across the organization.

Accessing Active Loans

Navigate to Payroll → Loans tab
Click on Active Loans filter button or select "Active" from the status dropdown
The table displays all loans currently in repayment

Active Loans Table Columns

Column	Description
Employee	Employee name, code, and department
Loan Type	Type of loan (Salary Advance, Personal Loan, Emergency Loan)
Principal	Original loan amount borrowed
EMI Amount	Monthly deduction amount from salary
Outstanding	Remaining balance to be repaid
Progress	Visual progress bar showing EMIs paid vs remaining
Next EMI	Date of next EMI deduction

Loan Status Indicators

Status	Badge Color	Description
Pending	Yellow	Loan request submitted, awaiting HR approval
Approved	Blue	Approved by HR, awaiting disbursement
Rejected	Red	Loan request was declined
Disbursed	Purple	Amount transferred, EMI starts next month
Active	Green	EMI deductions in progress
Closed	Gray	All EMIs paid, loan fully repaid

14.2 Pending Loan Approvals

Review and process loan requests submitted by employees.

Viewing Pending Approvals

Navigate to Payroll → Loans tab
Click on Pending filter button or select "Pending" from the status dropdown
A badge on the filter shows the number of pending requests

Pending Request Details

Each pending loan request displays:

Employee Information: Name, employee code, and department
Loan Type: Type of loan requested
Amount: Principal amount requested
Tenure: Requested repayment period in months
Reason: Employee's stated reason for the loan
Requested On: Date the request was submitted

Approving or Rejecting a Loan

Click the View button on a pending loan request
Review the loan details and employee information
To approve: Click Approve button
To reject: Click Reject button and provide a rejection reason

💡

Approval Considerations

Check if employee has any existing active loans
Verify the requested amount is within policy limits
Ensure EMI amount won't exceed 50% of employee's net salary
Review employee's tenure and standing

14.3 Loan Repayment History

View the complete repayment schedule and track EMI deductions for any loan.

Viewing Repayment History

Navigate to Payroll → Loans tab
Find the loan in the table (use filters if needed)
Click the View Details button
The loan details modal shows the complete repayment schedule

Loan Details Modal

The loan details view displays:

Section	Information Displayed
Loan Summary	Principal, Interest Rate, Tenure, EMI Amount, Total Payable
Current Status	Outstanding Balance, EMIs Paid, EMIs Remaining
Disbursement	Date, Mode (Bank Transfer/Cheque), Reference Number
Repayment Schedule	Month-by-month breakdown of all EMIs

Repayment Schedule Table

Each row in the repayment schedule shows:

Column	Description
EMI #	Installment number (1, 2, 3, etc.)
Due Date	Date when EMI is due
Principal	Principal component of the EMI
Interest	Interest component of the EMI
Total	Total EMI amount (Principal + Interest)
Balance After	Outstanding balance after this EMI
Status	Deducted, Pending, Paid, Waived, or Defaulted

Repayment Status Indicators

Status	Badge	Description
Pending	Yellow	EMI scheduled but not yet deducted
Deducted	Green	EMI successfully deducted from payslip
Paid	Blue	EMI paid outside payroll (cash/direct payment)
Waived	Purple	EMI waived by HR (exception cases)
Defaulted	Red	EMI not paid and marked as default

14.4 Loan Types

The system supports three types of employee loans, each designed for different needs:

Type	Description	Typical Tenure	Interest
Salary Advance	Advance against upcoming salary for immediate cash needs	1-3 months	Usually 0% (interest-free)
Personal Loan	Standard personal loan for planned expenses	6-24 months	Standard rate (e.g., 8-12%)
Emergency Loan	Quick disbursement for medical or family emergencies	3-12 months	Reduced rate (e.g., 4-8%)

Disbursing Approved Loans

After a loan is approved, HR Admin must disburse the amount:

Navigate to Payroll → Loans tab
Filter by "Approved" status to see loans ready for disbursement
Click Disburse on the approved loan
Select the disbursement mode:
- Bank Transfer: Direct deposit to employee's bank account
- Cheque: Physical cheque issued
- Cash: Cash payment (not recommended)
Enter the reference number (NEFT/RTGS/Cheque number)
Click Confirm Disbursement

💡

After Disbursement

Once a loan is disbursed, EMI deductions begin from the next payroll cycle. The loan status changes from "Approved" to "Disbursed" and then to "Active" when the first EMI is deducted.

💡

Best Practices for Loan Management

Set maximum loan limits based on employee's salary (e.g., 3x monthly gross)
Review pending loans weekly to ensure timely processing
Track employees with multiple active loans for risk assessment
Document all disbursement references for audit trail
Monitor default rates and adjust policies accordingly

⚠️ What Can Go Wrong

Even experienced HR professionals encounter issues during payroll. Here are the most common problems, why they happen, and how to fix them.

Common Mistakes & Recovery

❌

Finalized Payroll with Wrong Data

What happened: You finalized a draft but realized an employee's salary was incorrect, leave wasn't counted, or an adjustment was missing.

🔧

Recovery Path

If the run is not yet "Approved" → Go back to Drafts, delete the finalized run, fix the data, and re-process
If already "Approved" but not "Paid" → Contact system admin to roll back status
If already "Paid" → Create a correction adjustment for next month (Adjustment Type: "Correction")

✓ Safe Checkpoint: Always use "Processed" status as your review stage before finalizing

❌

Created Duplicate Payroll Run for Same Month

What happened: Two drafts were created for the same month/year, causing confusion about which one is correct.

🔧

Recovery Path

Identify which draft has the correct data (check employee count, total amounts)
Delete the incorrect draft(s) before finalizing
The system prevents finalizing if another finalized run exists for the same period

✓ Safe Checkpoint: Check "Payroll Runs" list before creating a new draft

❌

Employee Missing from Payroll

What happened: After processing, you notice an employee doesn't have a payslip generated.

🔧

Recovery Path

Check if employee has an active salary assigned (Payroll → Employee Salaries)
Verify employee's "Employment Status" is "Active"
Check if employee joined after the pay period end date
Assign salary, then use "Recalculate" on the draft to regenerate payslips

✓ Safe Checkpoint: Compare processed employee count vs. total active employees

❌

Loss of Pay (LOP) Days Incorrect

What happened: Employee's payslip shows wrong LOP days, affecting their net pay.

🔧

Recovery Path

Check employee's attendance records for the month (Attendance page)
Verify leave requests are approved and correctly marked
Regularize any missing attendance before recalculating
Use "Recalculate" on the draft to regenerate with correct LOP

✓ Safe Checkpoint: Complete attendance regularization before processing payroll

❌

Arrears Not Included in Payslip

What happened: You expected arrears from a salary revision, but they don't appear in the payslip.

🔧

Recovery Path

Go to Payroll → Arrears tab
Check if arrears are in "Pending" status (they need to be "Applied" first)
Click "Apply" on the pending arrears
Recalculate the payroll draft

✓ Safe Checkpoint: Check Arrears tab before processing each month's payroll

❌

Loan EMI Not Deducted

What happened: An employee's loan EMI wasn't deducted from their payslip.

🔧

Recovery Path

Check loan status in Payroll → Loans (must be "Disbursed" or "Active")
Verify loan start date is on or before the pay period
Check if loan is fully repaid (Closed status)
If loan was just disbursed, EMI starts from next month

✓ Safe Checkpoint: Review "Active Loans" list before processing payroll

Prevention Tips

Before You...	Always Check...
Create a payroll draft	All attendance is regularized, all leaves are approved
Process a draft	All employees have active salaries assigned
Finalize a draft	Review payslip totals, spot-check 2-3 individual payslips
Approve a run	All adjustments, arrears, and loans are correctly applied
Mark as paid	Bank file is generated, transfer is complete

⚠️

Point of No Return

Once payroll is marked "Paid", changes are extremely difficult. Always use the intermediate statuses (Processed → Finalized → Approved) as review checkpoints before proceeding.

✓ Setup Checklist

Follow this checklist to ensure your payroll system is fully configured:

Create Salary Components
Define all earnings (Basic, HRA, Allowances) and deductions (PF, PT) your organization needs.
Create Salary Structures
Combine components into structures. Create at least one default structure.
Configure Location Taxes
Set up Professional Tax and other location-specific taxes for each office.
Assign Salaries to Employees
Assign salary structures with CTC to all employees via the Employees page.
Process Monthly Payroll
Create drafts, process, review, finalize, approve, and mark as paid each month.

Monthly Payroll Checklist

Complete Attendance: Ensure all attendance is regularized and approved
Approve Leaves: Process all pending leave requests
Review Adjustments: Check for any pending salary adjustments
Create Payroll Draft: Create draft for the month
Process Draft: Calculate all payslips
Review Payslips: Check individual payslips for accuracy
Finalize Draft: Lock and create finalized run
Get Approval: Obtain management approval
Disburse Salaries: Process bank transfers
Mark as Paid: Record payment in system

🎉

You're Ready! Once all these steps are complete, your payroll system is fully operational.