Payroll & Compensation

The Payroll module handles the complete compensation lifecycle: defining salary components, building reusable salary structures, assigning compensation packages to employees, running payroll cycles, and generating downloadable payslips. A two-pass calculation engine ensures accurate tax and net pay computations.

---

Overview

Navigate to HR Panel → Payroll or /payroll. The module is divided into:

Section	URL	Description
Salary Components	/payroll/components	Individual earning, deduction, and tax components
Salary Structures	/payroll/structures	Reusable packages built from components
Employee Salaries	/payroll/employee-salaries	Assign structures + amounts to employees
Payroll Runs	/payroll/runs	Process payroll for a period
Payslips	/payroll/payslips	View and download individual payslips

---

Salary Components

Salary components are the building blocks of compensation. Each component represents a single line on a payslip — a basic salary, house rent allowance, income tax, provident fund deduction, etc.

Component Types

Type	Description
Earning	Money paid to the employee (adds to gross pay)
Deduction	Money subtracted from the gross pay
Tax	A special deduction type calculated as a percentage or via a tax slab

Calculation Types

Calculation Type	Description	Example
Fixed	A constant amount per period	Basic Salary = 5,000
% of Basic	A percentage of the Basic Salary component	HRA = 40% of Basic
% of Gross	A percentage of the total gross earnings	Provident Fund = 8% of Gross
Formula	A custom formula combining other components	Performance Bonus = Basic × KPI Score

Creating a Salary Component

1. Navigate to Payroll → Salary Components
2. Click Add Component
3. Fill in:

Field	Required	Description
Component Name	Yes	e.g., Basic Salary, House Rent Allowance
Short Name	No	Abbreviation for payslip (e.g., BASIC, HRA)
Type	Yes	Earning / Deduction / Tax
Calculation Type	Yes	Fixed / % of Basic / % of Gross
Value	Yes	Amount or percentage
Taxable	No	Whether this component is included in taxable income calculation
Description	No	Internal notes

4. Click Save

---

Salary Structures

A salary structure is a named collection of components. You create one structure per employment level or compensation tier, then assign it to multiple employees.

Example Structures

Structure Name	Components
Junior Staff	Basic, HRA (40%), Transport (Fixed), Income Tax (15%)
Senior Staff	Basic, HRA (50%), Transport (Fixed), Medical (Fixed), Income Tax (20%)
Management	Basic, HRA (60%), Car Allowance, Mobile Allowance, Income Tax (25%)

Creating a Salary Structure

1. Navigate to Payroll → Salary Structures
2. Click Add Structure
3. Enter a Structure Name
4. Add components by clicking Add Component Row:
   • Select the component
   • Optionally override the default value (e.g., increase the HRA % for this structure)
5. Click Save

---

Assigning Salary to an Employee

Before an employee appears in a payroll run, they must have a salary assigned.

1. Navigate to Payroll → Employee Salaries
2. Click Assign Salary
3. Select the Employee
4. Select a Salary Structure
5. Enter the Basic Salary amount (fixed components and percentages are calculated from this)
6. Set the Effective Date (the date from which this salary is valid)
7. Click Save

Salary history is tracked — you can add a new salary record (with a new effective date) to record a raise. The system uses the salary that was effective at the time of the payroll run date.

---

Running Payroll

Step 1: Create a Payroll Run

1. Navigate to Payroll → Runs
2. Click New Payroll Run
3. Configure:

Field	Description
Period	Month and year (e.g., April 2026)
Pay Date	Date employees will be paid
Department	All or a specific department
Notes	Optional internal notes

4. Click Generate Payroll

The system:

• Fetches all active employees with salary assignments
• Calculates each component for each employee using the 2-pass engine
• Creates individual payroll records
• Sets the run status to Draft

Step 2: Review the Draft

In the Draft state, you can:

• Review individual payslip calculations
• Manually override any component value for specific employees
• Add one-off bonuses or deductions
• Remove specific employees from this run

Step 3: Approve the Payroll Run

Once you are satisfied with the calculations:

1. Click Approve Run
2. Confirm in the dialog
3. Status changes to Approved

In the Approved state, individual records are locked. No further edits are possible without reverting the run.

Step 4: Mark as Paid

After bank transfers are completed:

1. Click Mark as Paid
2. Optionally upload a payment reference file
3. Status changes to Paid

Payslips are now available for employees to download from their self-service portal.

Payroll Run Status Flow

Draft → Approved → Paid
      ↑ (Revert to Draft if errors found)

---

Two-Pass Calculation Engine

GeniusHRM uses a two-pass calculation model to ensure accuracy for percentage-based components that depend on totals:

Pass 1: Calculate All Non-Dependent Components

• All Fixed earnings
• All % of Basic components (using the assigned basic salary)

Pass 2: Calculate Dependent Components

• % of Gross components (using the gross total from Pass 1)
• Tax calculations (applied after all earnings are summed)

This ensures that tax and gross-dependent deductions always reference the final, correct totals rather than intermediate values.

---

Payslip Generation and Download

Payslips are generated for each employee in every payroll run.

Viewing a Payslip (Admin/HR)

1. Navigate to Payroll → Payslips
2. Filter by employee, period, or run
3. Click View to see the payslip in the browser
4. Click Download PDF to generate a PDF version

Employee Self-Service Payslip Download

Employees can access their own payslips:

1. Log in and navigate to My Profile → My Payslips
2. Select the desired period
3. Click Download PDF

Payslip PDF Contents

Section	Content
Header	Company logo, name, address
Employee Info	Name, ID, department, position, period
Earnings	Itemised list of all earning components
Deductions	Itemised list of all deduction components
Tax	Calculated tax amount
Summary	Gross Pay, Total Deductions, Net Pay
Footer	Pay date, payment method

---

Payroll Reports

Navigate to Reports → Payroll to access:

• Monthly payroll cost by department
• Year-to-date payroll summary
• Component breakdown (what portion is basic vs. allowances)
• Year-over-year comparison chart

See Reports & Analytics for full details.