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Chapter 2: Payroll Component

Purpose

The Payroll Component module is used to configure the master data and payroll elements required for payroll calculation. It allows administrators to define organizational structures, salary components, leave settings, and accounting mappings before payroll processing.

1. Position

Purpose

The Position module manages the list of employee job positions within the organization. Create new position by code and description.

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Create New Position:

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Record Position:

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2. Department

Purpose

The Department module manages the organizational departments used throughout the payroll system. Create new department by code, department name. The head of department can add employees under the department.

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Create New Department:

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Record Department:

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3. Compensation

Purpose

The Compensation module defines employee salary structures and recurring earnings. Create new compensation is used to create a new payroll compensation record. Users can define salary information, statutory contribution settings, allowances, deductions, and overtime rules. The created compensation can then be assigned to employees and used during payroll processing.

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Create New Compensation:

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Record Compensation:

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4. Allowance

Purpose

The Allowance module manages additional payments provided to employees beyond their basic salary. Create new allowance is used to create and maintain different types of employee allowances. Allowances are additional payments provided to employees on top of their basic salary, such as meal allowance, transport allowance, housing allowance, or other benefits. The created allowance can be assigned to employees and included during payroll processing to calculate the employee's total compensation.image.png

Create New Allowance:

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Record Allowance:

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5. Deduction

Purpose

The Deduction module manages salary deductions applied during payroll calculation. Create new deduction is used to create and maintain employee payroll deductions. Deduction items are amounts deducted from an employee's salary during payroll processing, such as statutory contributions, loan repayments, or other employee-related deductions.

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Create New Deduction:

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Record Deduction:

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6. Overtime

Purpose

The Overtime module manages overtime payment settings for employees. Create new overtime allows users to create and configure different overtime payment types. Each overtime record defines the overtime code, description, calculation rate, unit, and statutory contribution settings. Overtime setup is required before processing overtime payments during payroll calculation.

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Create New Overtime:

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Record Overtime:

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7. Commission

Purpose

The Commission module manages commission-based earnings for eligible employees.is used to create and configure employee commission components. It allows the company to define commission types and determine whether statutory contributions such as EPF, SOCSO, EIS, PCB, and EA should be applied during payroll processing. Commission records created here can later be assigned to employees and included in the payroll calculation process.

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Create New Commision:

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Record Commission:

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8. Claim

Purpose

The Claim module manages employee reimbursement categories used in the Claim Approval process. Create new claim is used to define different types of employee reimbursement claims in the payroll system. It allows the company to set claim categories and control the maximum claim amount that employees can submit within a month or year.

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Create New Claim:

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Record Claim:

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9. Leave Setup

Purpose

The Leave Setup module configures company leave policies and entitlement rules. Create new leave setup is used to configure leave entitlement rules for employees. It defines which Leave Types are available, employee confirmation requirements, entitlement schemes, and maximum carry-forward days. This setup allows the payroll system to automatically calculate employee leave entitlement based on company policies.

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Create New Leave Setup:

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Record Leave Setup:

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10. Leave Type

Purpose

The Leave Type module defines the different categories of leave available to employees. Create new leave type is used to define different categories of employee leave in the Payroll module. HR administrators can configure leave rules such as entitlement, unpaid status, and balance carry forward settings. This setup allows the system to automatically manage employee leave balances and leave applications.

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Create New Leave Type:

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Record Leave Type:

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11. Account Posting

Purpose

The Account Posting module maps payroll components to the company's accounting ledger. It ensures payroll transactions are posted to the correct General Ledger (GL) accounts during payroll processing.

Functions

  • Configure GL account mapping
  • Assign debit and credit accounts
  • Link payroll components with accounting codes
  • Support automatic accounting postings

Common Posting Accounts

Payroll Component Example GL Account
Basic Salary Salary Expense
Allowance Allowance Expense
Overtime Overtime Expense
Commission Commission Expense
EPF EPF Payable
SOCSO SOCSO Payable
PCB Tax Payable
Bonus Bonus Expense

Payroll Component Workflow

Create Organization Structure
        │
        ▼
Configure Payroll Components
        │
        ▼
Assign Components to Employees
        │
        ▼
Payroll Entry
        │
        ▼
Payroll Process
        │
        ▼
Account Posting

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