This section allows the management of salary components contained in an employee’s pay package. Salary components can be viewed as building blocks with which simple and complex pay packages can be built. From this screen you can add, edit and delete salary components
Creating Salary Components
To create a Salary components, navigate to Admin > Job > Salary Components, Click on “Add” and fill in the necessary fields using the information below
- Component Name: This is the unique name of the salary component
- Country: This specifies which country the component applies to. If this is set to “All” then it will apply to all countries otherwise it only applies to the selected country
- Type: This specifies the component type as detailed below
- Income: This component will increase the employee’s pay package
- Deduction: This component will decrease the employee’s pay package
- Calculation: This component will derive its value from the summation of selected calculation components. Use this component type to calculate sub totals where required. Note: Calculations do not directly increase or decrease the employee’s pay package and are not shown on the payslip.
- Calculation Item: This component can be used for any value which is part of a calculation but does not need to be shown on the payslip. Note: If the value type for this component is “Amount”, it will be editable from the “Earning History” screen and will be pro-rated same way as income. This value is used as is and not cumulated for YTD calculation purposes
- Progressive Tax: This component is used for calculating income tax and other taxes.
- Tax Refund: This component is used for refunding over paid tax back to an employee, it can also be used to deduct underpaid tax from an employee by providing a negative value for the component.
- Tax Allowance: This component is used for tax allowances / deductions which can be used in calculating income tax. Note: Tax allowances do not directly increase or decrease an employee’s pay package but instead used to decrease an employee’s taxable income.
- Cost to Company: This specifies whether a deduction is partly or wholly paid for by the company
- Company Percentage: This specifies the portion of the deduction amount that is payable by the company
- Proration excluded: This specifies if an income item will be subject to proration where applicable or not
- Value Type: This specifies the method by which the component derives its value
- Amount: The value of the component will be typed in
- Percentage: The value of the component will be derived by applying the specified percentage to the selected base component’s value
- Approved Leave Count: The value of the component will be the total approved leaves which are “eligible for leave allowance” in the current month (or payroll period)
- Base Component: This is an existing component to which a specified percentage is applied to derive the value of a “Percentage” type component or whose value is added to derive the value of a “Calculation” type component.
- Minimum Tax (%): This determines the minimum tax percentage for “Progressive Tax” components
- Minimum Tax Basis: This is the component to which the minimum tax percentage will be applied to determine the minimum tax value for “Progressive Tax” components
- Minimum Monthly Wage: This applies only to Nigeria and determines the monthly wage on on below which tax payable will be zero
- Calculation Components: This contains the components whose values will be summed up to derive the value of a “Calculation” type component.
- Add Component Button: Adds the currently selected base component to the calculation components list.
- Remove Component Button: Removes the currently selected calculation component from the list.
- Tax Band Type: This specifies the current band position when creating a progressive tax component
- First: Use this for the very first tax band
- Next: Use this for all tax bands except the first
- Above: Use this after all “Next” bands have been entered
- Band Value: This is the amount to be taxed in the current band
- Band Percentage: This the percentage to be applied to the current band
- Add Tax Band Button: Adds the current tax band to the list of tax bands
- Clear Tax Bands: Clears all tax bands on the list
- Save Button: Click this button to save changes.
- Cancel Button: Click this button to cancel changes.
- Reset Defaults for all Employees: Click this button to reset the value for this component to the set default across all employees
Editing Salary Components
To edit a salary component, navigate to Admin > Job > Salary Components. Click on a salary component and change the information as required (See Creating salary component). When done, click the “Save” button to save changes or the “Cancel” button to discard changes.
Deleting Salary Components
To delete a salary component, navigate to Admin > Job > Salary Components. Select the checkbox beside the salary component(s) you want to delete and the click the “Delete” button. Note: You cannot delete “Basic Earnings”, “Project Pay” and “Income Tax” as they are system components.