Payroll policy and calendar
A payroll policy holds the rules for a group of employees paid the same way, usually one per country or legal entity. Set it up in Payroll configuration → Payroll policy.
Policy fields
| Field | What it does |
|---|---|
| Policy name | Identifies the policy. |
| Country, Currency | The country rules and the currency amounts are shown in. |
| Compensation input frequency | Annual: salaries are entered per year and divided by 12 (India, UK, US). Monthly: salaries are entered per month (UAE, GCC). |
| Pay frequency | Monthly or Weekly. |
| Pay days counted as | What one day of salary is worth. See below. |
| Decimal precision, Rounding rule, Rounding level | How amounts are rounded. |
| Attendance cut-off | When attendance for the period stops being counted. See below. |
| New joiner cut-off | When joiners are moved to the next period. See below. |
| Retirement age, Pension age | Used for statutory rules. After the pension age, the employer's pension (EPS) share stops and goes to PF instead. |
| Total package includes PF admin and EDLI charges | Only for countries with PF, such as India. See below. |
Total package in India
In India, salary is usually agreed as a total package, also called CTC (cost to company).
- Total package = gross pay + employer contributions (employer PF, employer ESI, gratuity and other employer components).
- Net pay = gross pay − employee PF, employee ESI, professional tax and income tax (TDS).
- Variable pay, bonuses and other one-time payments are paid on top and are not part of the total package.
Total package includes PF admin and EDLI charges decides who absorbs these charges. They are 0.5% each of the PF wage.
| Example: total package 30,000 a month, PF wage 15,000 | Switch on | Switch off |
|---|---|---|
| Employer PF (12%) | 1,800 | 1,800 |
| PF admin + EDLI | 150, inside the package | 150, on top |
| Gross pay for components | 28,050 | 28,200 |
| What the company spends | 30,000 | 30,150 |
Select How the total package works under the switch to see this example in the app.
How pay days are counted
The pay-days basis decides how much is deducted for a day of loss of pay (LOP) and how much a joiner or leaver is paid for part of a month.
| Basis | A month counts as |
|---|---|
| Calendar days in the period | Every day in the month: 28 to 31. |
| Fixed number of days | The same number every month, often 26 or 30. |
| Working days in the period | Days that aren't week offs or holidays. |
Example
Monthly salary 30,000, in a 30-day month with 8 week offs and 1 holiday, leaving 21 working days. Fixed days set to 26.
| Basis | One day's pay | Full month with 1 day LOP |
|---|---|---|
| Calendar days (30) | 1,000.00 | 29,000.00 |
| Fixed days (26) | 1,153.85 | 28,846.15 |
| Working days (21) | 1,428.57 | 28,571.43 |
Calendar and working days change the day value from month to month; fixed days doesn't. Working days needs week off and holiday information, so it works best with attendance from the system rather than uploaded attendance.
Select How are pay days counted? on the policy for the same comparison with your own numbers.
Attendance cut-off
| Option | Effect |
|---|---|
| At the end of the pay period | All of the period's attendance is counted. |
| On a day of the month | Attendance is counted up to the Cut-off day of the month. |
| Some days before the period ends | Attendance is counted up to that many Days before period end. |
Days after the cut-off are paid as present. Any LOP found for them later is adjusted in the next period.
New joiner cut-off
| Option | Effect |
|---|---|
| No cut-off, pay joiners up to the period end | Everyone who joins in the period is paid in it. |
| On a day of the month / Some days before the period ends | Employees who join after the cut-off are left out of this period's run and paid in the next regular run, with this period as arrears. You can still include them by hand. |
Payroll calendar
In Payroll configuration → Payroll calendar:
- Choose the policy and year.
- Select Generate calendar. Choose the Starting month for the payroll year. Only missing months are generated.
Each period shows its Pay period dates and its Attendance window, the days whose attendance and LOP count in that period's pay. A run can't be created for a period that hasn't been generated.
You can Delete period or Delete all periods of this year only while they have no runs.