Payroll process - Step 2

Payroll process - Step 2

Menu Path : Payroll > Payroll Run
Accessible to : Payroll Manager

In the second step of running payroll the adhoc payments and recoveries can be done. All payouts and recoveries which are not in salary structure or modeled as variable pay in salary structure will need to be processed from this page.

Activities in yellow background are compulsory and you will need to "Validate" them before you can proceed to next step. Activities in green background are optional.


Each activity on this page is explained below.

1. Leave Encashment payouts

If employees have submitted leave encashment requests you will be able to review them. Click on "Validate" button to open the popup as shown below.


If you do not want to pay Leave Encashment for an employee you can uncheck the checkbox in the first column. For the employees where you want to pay you can reduce the days for which the encashment is to be given in the last column. The days which have been reduced will come for payment in the next payroll.

2. Leave Without Pay / LOP deductions

If the feature to automatically convert missing attendance to LWP is not enabled then only the LWP which have been approved in the Leave module will come in this step. If LWP had been previously deducted in payroll and subsequently reversed then you will see the entry in LWP Reversal column.

If Attendance Policy based deduction feature is activated and if there are LOP being deducted due to late coming or short working you would be able to review and validated them too.

Click on "Validate" button and the popup as shown below will open. If you want to review the records in excel then click on "Download" button.


Click on "Validate" button in the table as shown above to confirm these deductions / reversals.

Refer to articles on LWP deductions and Leave Encashment for more details.

If Attendance Policy based leave deduction feature is enabled then in India payroll LOP which is created based on attendance policies will also impact the payroll in the same manner as LWP. Refer article on Automatic deduction of leaves based on attendance policies for more details.
- deduction basis for LOP will be same as LWP
- all other settings of LWP deduction will also apply on LOP

Notes
Note - There is one difference in the way LWP and LOP are treated in the system. LOP is treated as a working day from statutory compliance point of view in payroll as the employee's status for the day is Present and not on Leave Without Pay. Due to this reason, in salary slips, salary register, salary reports where the value of LWP was being shown the value of LWP+LOP will be shown. But in ECR file and ESI Output file only LWP will be shown.

3. Overtime Payouts

If overtime feature is activated then overtime hours will be picked up from time sheet. The calculation of payout for Overtime hours will be based on the overtime scheme and the heads of wages selected against overtime in deductions and encashment table. All approved timesheets which have overtime hours up to the last day of the month are included in the calculation. System will consider data for previous months also in the overtime calculations. This section will be visible only if Overtime feature has been activated in your company.

You will need to validate the hours for which overtime will be paid.


4. Statutory Bonus Payments

If the feature to pay Statutory Bonus is activated in setup then you will get the option to pay it as shown below. Refer to the document Payment of Statutory Bonus for details on various options for payment of Statutory Bonus. This section will be visible only if the Statutory Bonus feature has been activated in your company.

5. Variable Salary Payments

Through this option you can pay salary against variable heads which are included in the salary structure. Click on "Process" button. You will be navigated to a new page where you can update the variable payouts either manually or using the bulk upload method.


You can "Save as Draft" but unless you click on "Submit" data for this section will not be submitted.

6. Adhoc Payments / Deductions

Through this option you can make adhoc payments and adhoc deductions. Click on "Process" button. You will be navigated to a new page where you can update the variable payouts either manually or using the bulk upload method.

Fields which are created in Adhoc Payment / Adhoc Deduction category in setup are visible here. You can also make the adhoc payment by creating a payment plan, refer to the article on Adhoc Payouts and Deductions for more details. You can also make payment of Statutory Bonus. You can "Save as Draft" but unless you click on "Submit" data for this section will not be submitted.

7. HR Advance Recovery

If Advance and Expense module is in use then you can recover outstanding advances (beyond a certain age as specified in Advance setup) in payroll. This section will be visible only if there are HR advances pending for recovery. Click on "Process" to navigate to the next page.

If advances are of another currency then you will need to input the exchange rate and click on "Refresh". This will prefill all the cells with the outstanding amount, you can correct the amount to a lower amount if you do not want to recover the whole amount.


Please note these are not loans / salary advances which are automatically recovered in payroll but these are advances given for business purposes. If the advance recovery is leading to net salary becoming negative then the advance recovery will be reduced to make the net salary as zero.

8. Negative Salary Recovery


If any employee had negative salary in previous month then you will see the table as shown above. Salary can become negative due to
- excessive loan recovery
- backdated salary correction
- leave without pay updated for previous months
- high tax deduction
You can decide to reduce the amount of negative salary which is to be adjusted. This adjustment will be done only from net salary, in other words there has to be enough in the net salary of this month for the recovery to happen. If the net salary is not enough then the unrecoverable amount will be carried forward to next month. You can see details of negative salary in Reports > Payroll > Salary Reports > Negative Salary Transactions.  If there is negative salary or if negative salary is being recovered then it is clearly mentioned in salary slip.

9. Previous Payment Recovery

Refer to article on Previous Payment Recovery for more details.

Any inputs updated in the previous 9 sections can be reviewed by clicking on "Download" button and reset and corrected if there are any gaps.

Once all in inputs have been provided and checked you should proceed to the next step. Click on "Next" button as shown above.


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