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Salary Structures

Salary Structures are templates that combine salary components into reusable packages. When assigning a salary to an employee, you select a structure and set the basic salary - all other components are calculated automatically based on their rules.

What you can do here:

  • Create salary packages by combining components
  • Preview how salary breakdowns look
  • Set default structures for new employees
  • Manage structure templates for different employee types
Salary Structures Overview

Why Use Salary Structures?

Salary structures provide a standardized way to:

  • Ensure Consistency: Apply the same compensation formula across similar roles
  • Simplify Onboarding: Assign salary packages quickly to new employees
  • Reduce Errors: Automatic calculations prevent manual mistakes
  • Maintain Compliance: Ensure all required statutory components are included
  • Enable Comparisons: Compare compensation packages across the organization

Think of a salary structure as a recipe. The components are ingredients, and the structure defines how they combine. When you assign a salary, you just specify the “base” (basic salary) and everything else is calculated automatically.

Summary Cards

CardDescription
Total StructuresNumber of salary structures defined in the system
Default StructureThe structure automatically assigned to new employees (if set)

Structure Properties

ColumnDescription
StructureName and code of the salary structure
DescriptionExplanation of the structure’s purpose
ComponentsNumber of salary components included
StatusActive or Inactive

Creating a Salary Structure

  1. Click Add Structure
  2. Enter the structure code and name
  3. Add a description (optional)
  4. Select components to include
  5. Preview the salary breakdown
  6. Click Create Structure
Create Salary Structure

Basic Fields

FieldDescriptionRequired
CodeUnique identifier (e.g., STANDARD, MANAGER, EXECUTIVE)Yes
NameDisplay name (e.g., Standard Package, Manager Package)Yes
DescriptionOptional explanation of who this structure is forNo
Default StructureUse this structure by default for new employeesNo

Adding Components

The components section allows you to select which salary components to include in the structure:

  1. Browse the Available Components list
  2. Click the + button next to a component to add it
  3. Added components move to the Selected Components section
  4. Components are organized by type (Earnings, Deductions, Employer)

When selecting components, consider the full picture: earnings (what they receive), deductions (what’s withheld), and employer contributions (what the company pays extra).

Preview Panel

The preview panel on the right shows:

FeatureDescription
Preview Basic SalaryEnter a sample basic salary to see the breakdown
Component BreakdownShows calculated values for each component
Gross SalaryTotal of all earnings
Net SalaryTake-home pay after deductions
Total CTCCost to Company including employer contributions

The preview helps you verify the structure works correctly before saving. Test with different salary amounts to ensure calculations are accurate at all levels.

Common Salary Structures

Standard Employee Package

A typical structure for regular employees:

Component TypeComponents
EarningsBasic Salary, HRA, Conveyance Allowance, Special Allowance
DeductionsPF (Employee), Professional Tax, TDS
EmployerPF (Employer), ESI (Employer), Gratuity

Executive Package

A structure for senior employees:

Component TypeComponents
EarningsBasic Salary, HRA, Car Allowance, Mobile Allowance, Performance Bonus
DeductionsPF (Employee), TDS
EmployerPF (Employer), Gratuity

Consultant Package

A simplified structure for contractors:

Component TypeComponents
EarningsConsulting Fee
DeductionsTDS
EmployerNone

How Structures Work in Practice

Assigning a Structure

  1. Go to an employee’s profile
  2. Navigate to the Salary section
  3. Select a salary structure
  4. Enter the basic salary amount
  5. The system calculates all other components automatically

Calculation Example

For a structure with:

  • Basic Salary: Fixed Amount
  • HRA: 50% of Basic
  • PF Employee: 12% of Basic (capped)

When Basic = 50,000:

  • HRA = 25,000 (50% × 50,000)
  • PF Employee = 6,000 (12% × 50,000)

Managing Structures

Editing a Structure

  1. Find the structure in the list
  2. Click the menu button (…)
  3. Select Edit
  4. Modify components or settings
  5. Click Save Changes

Changes to a structure affect future salary calculations only. Employees already using the structure will keep their current setup until you update their individual salary records.

Deactivating a Structure

If a structure is no longer needed:

  1. Click the menu button (…)
  2. Select Deactivate

Deactivating a structure doesn’t affect employees already using it. It only prevents the structure from being assigned to new employees.

Best Practices

  • Name structures clearly: Use names that indicate the target group (e.g., “Junior Developer”, “Senior Manager”)
  • Start with essentials: Include only necessary components initially, add more as needed
  • Include all statutory: Ensure structures include all legally required components
  • Set a default: Configure a default structure to speed up onboarding
  • Test thoroughly: Use the preview feature to verify calculations before saving
  • Document variations: If you have multiple similar structures, document the differences

Create structures based on job levels or departments rather than individual roles. This reduces the number of structures you need to maintain.

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