Add an employee's allowances and deductions

A pay line is one salary component attached to one employee, for example a 1,500 housing allowance or a 2% union fee. This screen holds every pay line, on two tabs: Allowances for what is added to pay and Deductions for what is taken off. The payroll run reads these lines each time you process it.

Before you start

• Create the components first in salary components.

• Social insurance and income tax do not belong here. They apply to every payslip and come from HR settings.

Add an allowance

1. Open People › Payroll › Employee Allowances & Deductions Management. The Allowances tab opens.

2. Select "New Allowance", then choose the Employee and the Salary Component.

3. The form fills in the component's value. A fixed component fills the Amount, and a percentage component fills the Percentage. If the component allows a different value per employee, you can change it. Otherwise the field stays locked.

4. Enter Effective From and, if the allowance ends, Effective To.

5. Keep the Status Active, add Remarks if needed, and select Save.

When the payroll run includes an allowance

The run includes an allowance line when all three hold:

• the line's status is Active;

• Effective From is on or before the last day of the payroll period;

• Effective To is empty, or on or after the last day of the period.

A percentage is calculated on the employee's basic salary for the period, after proration when the employee joined or left during it. To pay an allowance for one month only, set Effective To to the last day of that month. The payroll run does not use the Recurring switch to decide this; the status and the dates decide.

Add a deduction

1. Open the Deductions tab and select "New Deduction".

2. Choose the Employee and a deduction Salary Component.

3. Under Deduction type, choose one of the two kinds:

   • "Installment plan": enter the total amount, the installment and the number of installments. The installment cannot exceed the total amount.

   • Recurring: enter an Amount or a Percentage of basic salary, not both.

4. Enter the Start date and, for a recurring deduction, an End date if it stops.

5. Add a Reason and select Save.

How the payroll run takes a deduction

• A deduction is considered from the first payroll period whose last day falls on or after its Start date. A recurring deduction stops after its End date.

• An installment plan takes one installment per monthly run. The Installments · Remaining column shows how many have been recovered and the balance left. When every installment is recovered, or the balance reaches zero, the line turns Completed.

• Deductions come after social insurance, benefit contributions, absence and regulatory deductions, and after income tax. Net pay never goes below zero: when the pay left cannot cover a full installment, the run takes what is left. It reduces the balance but does not count an installment, so the full amount is tried again next period.

• Installments and recurring deductions do not reduce taxable income.

Common questions

I changed an allowance but the payslip did not change. Changes apply to the next payroll run you process. To update a payslip that already exists, roll the run back to draft and process it again, as described in running payroll.

What happens when I delete a line? It is no longer applied in future payroll runs. Payslips already produced keep it.