Set up salary components

Salary components are the building blocks of every salary — Basic, HRA, Special Allowance, PF and so on. Set them up once before you build salary structures.

Before you start

• You need the Run payroll, edit salary, FnF, deduction rules & adjustments permission. With view-only access you can see components but not change them.

Steps

1. Go to Payroll → Salary Structure in the left menu ( open Salary Structure).
2. Open the Components tab. Earnings and deductions are listed separately.
3. Click Add Component to open the Add Salary Component form.
4. Enter a Name and a short Code (for example BASIC, HRA, SPECIAL). Codes must be unique.
5. Choose the type:
   • Earning — paid to the employee and pro-rated for loss of pay.
   • Deduction — a fixed monthly recovery. It is not pro-rated.
   • Employer Contribution — part of CTC but not paid out monthly.
6. Choose the Calculation Type: Fixed Amount, or Percentage with Percentage Of set to Basic Salary, Gross Salary or CTC.
7. If the component is PF, ESI, professional tax, TDS, labour welfare fund or gratuity, tick Statutory and pick it in Statutory Type.
8. Tick the boxes that apply — Taxable, Part of CTC, Part of Gross, Active — and set a Display Order for the payslip.
9. Click Save Component.

Good to know

• The component's own calculation is only a default. A salary structure can set a different calculation for the same component.
• You can't delete a component that is already used in an employee's salary. Mark it inactive instead.
• Which components count as PF wages is set in Statutory Settings → PF · ESI · general → Components counted as PF wages (Basic + DA by default).

Next steps

• Build a salary structure