Salary components and salary groups
How earnings and deductions are defined and bundled into the structure assigned to each employee.
Salary components
A salary component is either an earning or a deduction. Components tied to statutory calculations (ESI, PF, or both) carry their statutory percentages and wage limits directly on the component, rather than being calculated separately.
Salary groups
Components are bundled into a salary group, and each employee is assigned a group. If you don't assign one, your company's default group applies.
Base pay and salary history
An employee's base pay and every change to it - initial assignment, increment, decrement, or an advance - are kept as a full history, not overwritten as a single current figure. This means past salary changes stay visible for reporting and audit purposes.
Daily-wage employees
Employees paid on a daily-wage basis are handled separately from the standard monthly salary engine, so their payroll is calculated per day worked rather than as a fixed monthly figure.
Variable pay and overtime
Variable or incentive pay, and any approved overtime, are added into gross pay automatically when payslips are generated.
Best Practices
- Always validate statutory components at the beginning of every financial year to reflect new government updates.