The term 'Salary head' refers to the heading under which salary is assessed. Salary head differs from companies to companies & also it varies from employees to employees. For ex.: A company may remunerate its employee salary in heads like Basic Salary, Dearness Allowance, Travelling Allowance, Provident Fund, Security Deposit etc., while another company may or may not provide Travelling Allowance to their employees. Every company has their own set of rules to design salary heads of their employees.
Basically there are two different types of Salary Head.
- Earning Salary: Any salary head which is earned by employee is called Earning Salary. For ex.: Basic Salary, Dearness Allowance are earned salary type.
- Deduction Salary: Any salary head which is deductible from employee salary is termed as Deduction Salary. For ex.: Provident fund is a type of deduction salary, as it is deducted from the gross salary.
Attached image shows how to configure salary head in Employer Zone App. The left side box contains a form which is used to add new Salary head and right side box contains a table which is used to 'list all salary head' that are already added in the system.
|Type||Yes||Dropdown||Can be earning or deduction|
||Textbox||Name of the salary head|
To change the name of salary head or salary type, click on the 'edit' icon and to delete a salary head, click on the 'delete' button. Please note that deleting a salary head may results in deletion of related records.
During the calculation of the salary, salary type is used to calculate whether the salary head is added or subtracted. Lets take an example. Below table shows salary of an employee:
|Net Salary = Basic Salary + Dearness Allowance + Travelling Allowance - Provident Fund - Security Deposit||5450|
The salary head is to be configured in advance before using Payroll module in the system.