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Payroll Masters in Tally PRIME

Posted by Asok K Nadhani on

In this chapter, we explain activation of Payroll System, Master creation / set up for Payroll system in Tally PRIME

Payroll set up in Tally PRIME

To activate Payroll system for the Company, first set up the options related to Payroll in Company Features

Click F11 at K:Company Tab (or press F11 key). At Company Features screen (F-1A) at the top left, set Yes at Show More features and set Yes at Show All Features to get the Payroll set up options (otherwise Payroll options will not be shown in the screen). Under Payroll section, set Yes at Maintain Payroll, to activate Basic Payroll Features for the Company (F-1A).

F-1A: Payroll Activation for the Company

Employee Group Creation in Tally PRIME

For better management of Payroll System, Employees are normally grouped into Departments / Grades. Select GoT>Create> Employee Group from Masters List (F-2A), to get Employee Group creation screen (F-3A).

F-2A: Payroll Masters Creation Menu

Employee Group Master Entry in Tally PRIME

At Employee Group Master Creation / Alteration (F-3A), enter the Employee Group details as follows:

  • Employee Group Name : At Name, Enter Employee Group Name
  • Parent Group : At Under, select Primary or another Employee Group from the list of Groups. The first created Group must be placed under Primary.
  • Group Salary Structure : At Define Salary Details, Set Yes to define Group salary structure applicable for all Employees of the group, else set No (to set up salary structure of individual employee at Employee Master)

If there are few Employees, All Employees may be placed under auto created Primary Group (no need to create Employee Group), to keep the system simple.

F-2B: Employee Group Creation

Attendance / Production Heads in Tally PRIME

Attendance / Production Heads are created to maintain records for each type of Attendance (like Attendance, Medical Leave, Privilege Leave, Without Pay) etc, for Time based Salary computation and Production Heads (For Production based wages Computation). If Salary is manually computed and entered in Payroll Voucher, as explained in next chapter, there may not be any need to create Attendance / Production heads.

Select GoT>Create. Select Attendance / Production Type from Masters List (F-2A) to get Attendance / Production Type creation screen (F-3A).

F-3A: Attendance Head creation

Attendance / Production Head Master Entry in Tally PRIME

At Attendance / Production Type creation screen (F-3A), enter as follows:

  • Name : Enter Attendance / Production Head Name
  • Parent Group : At Under select Primary or another Attendance / Production Head. The first created Head must be placed under Primary.
  • Attendance Type : Select the type from the list
  • Period Type : Days would normally be auto selected

Pay Head Creation in Tally PRIME

Salary / Wages are paid under different pay Heads. Sometimes, some deductions are also made from pay. Calculation methods may be different for each Pay and Deduction Head. So, to make proper Pay computation, print Pay Slip, Pay Register and maintain proper Payroll Accounts, create Pay Head Masters for each Pay and Deduction Heads.

To create a Pay Head, select GoT>Create. Select Pay Headfrom List of Masters (F-2A) to get Pay Head entry screen (F-4A).  

F-4A: Pay Head creation / Alteration

Pay Head Entry in Tally PRIME

At Pay Head entry / Alteration screen, enter as follows (F-4A) :

  • Pay Head Name : At Name, enter the Name of  Pay Head. A Ledger Account of this Name would be automatically created on saving the Pay Head.
  • Pay Head Type : At Income Type, select  the Pay Head Type from the list (F-2E).
    • Income Type :  This field appears only when you select Earnings from Employees  or Reimbursement to Employees (Incomes for Employee) at Pay Head Type. Select the Income Type from the list (Fixed / Variable).
  • Account Group: At Under, select the Parent Account Group for the Pay Head Ledger (or Create the desired Account Group).
  • Pay Head Nature : At Affect Net Salary, set Yes forPay Headswhich affect Net Pay in Pay Slip (like Basic, DA, I Tax, P tax, P F Deduction, ESI Deduction etc)
  • Pay Head Title : At Name to be displayed in Payslip,  write Brief Pay head name in to be printed in PaySlip / Pay Register
  • Gratuity Includible : At Use for Calculation of Gratuity(this appears only when you select Earnings for Employees at Pay Head Type (F-1B), set Yes for those Earnings Pay Heads which are included in Gratuity computation (such as Basic Salary, HRA, etc.), else set No for those Earnings Pay Heads which are NOT included in Gratuity computation (such as Overtime).
  • Pay Head Calculation Type : At Calculation Type, select the Calculation Type from Calculation Type list.

F-4B: Calculation Type List selection

  • Attendance / Leave : Depending on selection of Calculation Type, you may get further option like Attendance / Leave with Pay. Select accordingly from the list.
  • Pay Calculation Period : This option appears for Calculation Type Flat Rate or Computed Value (depending on selection of Calculation type, the next options vary). Select the Calculation period from the list.

F-4C: Pay Calculation Period Selection

  • Rounding Info : At Rounding Method, select the Rounding Method and then select the Rounding

Limit

Pay Head Configuration in Tally PRIME

At Pay Head creation (F-4A), click F12 to get Pay Head Configuration screen (F-4D). Set the configuration options.

F-4D: Pay Head Configuration

Employee Master Creation in Tally PRIME

Select GoT>Create>Employee to get Employee Master creation (F-5A)

F-5A: Employee Master Creation

Employee Master details entry :

Enter the respective personal details of the Employee, as follows :

  • Salary Details : To enter Pay Head details manually in Pay Voucher, as explained later, set No at Define Salary Details. To get Pay computed from Attendance & Pay Details in Employee master, set Yes at Define Salary Details and enter the Salary Structure & Rates in respect of the Employee, as explained at Employee Pay Structure in next chapter.
  • Other Details : Enter other details of the Employee.

Save the Employee master. This way, enter the details in respect of each employee.

Employee Master Configuration

At Employee Master creation / Alteration screen (F-5A), click F12:Configure and set the options (F-5B).

F-5B: Employee Master Configuration

Payroll Master – Key Points

  • F11 से  Company Features  में Maintain Payroll  में  Yes set Company में  Payroll option activate kare
  • GoT>Create से  Employee Group Select कर  Employee Group Master create करे .
  • GoT>Create से  Attendance / Production Type select कर  Attendance / Production head create करे
  • GoT>Create से  Pay Heads select कर  Pay Heads  create करे
  • GoT>Create से Employee (F-2A) select कर Employee Master create करे
  • Employee master की  complete details  की  कोई  list नहीं  मिलती. Chart of Accounts से  सिर्फ  Employee Name और  Alias के  अलावा  और  कोई  भी  details show नहीं  होता