In this article the process for revising salary for one employee is explained. Refer to article on "Updating salary structures in bulk" to understand how salary can be updated for many employees in bulk. There are four types of changes in salary structure

1. Salary increment - salary is increased
2. Salary decrement - salary is reduced
3. Structure change  - salary structure is changed but total amount is not changed
4. Flexible heads change - this is a similar to Structure change but is a special case wherein only the "flexible heads" are changed, this is also shown as Structure change in reports

Menu Path : Payroll > Employee Details > Employee - Salary Structure
Accessible to : Payroll Manager

Existing salary structure of the employee is visible on this page, you have four options

Option 1 -  Changing the month for Annual category heads

You can edit and change the month of an Annual Tax Free or Annual Taxable category head without modifying the salary structure, in the system this will not show as Structure change. There are two types of heads - Fixed or Variable. The example below explains both the scenarios in detail -

Example 1 - Annual Bonus; Variable head

Suppose there is a head "Annual Bonus" payable in September and payroll till December has been run. If any amount has been paid against this head then on editing only April to August will come in the drop-down. This ensures that the change is only applicable from next year.

If nothing has been paid against this head in September then you can select any month including January to pay this employee during January payroll.

Example 2 - Annual Bonus; Fixed or % of Salary head

Suppose there is a head "Annual Increment" which is fixed and was payable in September and payroll till December has been run. On editing only April to August will come in the drop-down. This ensures that the change is only applicable from next year.

Both these scenarios are handled without a salary modification and salary modification letter is not generated.

Option 2 - Changes in flexible heads

Without going through a salary modification process you can also change the heads which are not flexible to flexible. This option is only available if "Flexible benefit feature" is activated and is available only on those heads where flexi is allowed as per setup. Use Edit given on the row to modify the nature of the heads.

Option 3 - Modifying salary

When you click on "Modify salary", a new page will open. You can enter revised CTC (or Gross salary) and effective month. The effective month can be in past till the beginning of the financial year or in future till next month.

If mid month salary increment feature is activated in your company then you can modify employee's salary from any date from month. If you want this feature to be activated please get in touch with your Account Manager. There are two scenarios in which salary cannot be modified from middle of the month -

1. if employee's date of joining is in the middle of the month - for example if employee joining date is 16-Apr then revision will not be allowed from 16-Apr for this employee, you can revise salary from 1-May

2. if the last working day is in the middle of the month a similar condition is applied

After entering the details click on "Create Revised Salary Details" button. System will automatically create the revised salary structure based on the salary template. You can edit and modify any row except the Special Pay which is calculated automatically.

If you want to add some CTC components you can select them from the CTC components table, system will automatically calculate the value for these heads.

If payroll is not processed after this salary revision then you can come back to this page and delete the revised salary structure. But once payroll is processed after salary revision you will not get the option to delete.

Removal of a head from salary structure

If we want to remove a head from the salary for example HRA of Rs 20,000 in the month of July, after having paid HRA for 3 months in a financial year. We can do so by following these steps
1. Change the value of HRA to 0 from 20000 effective date 1/April
2. This amount will get transferred to special pay
When we process July payroll we will get the following
- HRA arrears of Rs -60,000
- Special pay arrears of Rs +60000

For removal of reimbursement heads refer to Option 4.

There is no communication to employee or generation of increment letter at this stage. Refer to the article on "Generating and Emailing Increment Letters" for more details.

Option 4 - Modifications in Reimbursement Heads

If reimbursement claims process is activated and you want to modify the value in any reimbursement head then there are three options available -

1. Reduction in the reimbursement heads - the value of a reimbursement head cannot be reduced to less than the amount already paid to the employee. The amount which has been paid to the employee can be checked from Reports > Payroll > Expense Reports > Expense Register. If there are submitted or approved claims and head is reduced then these claims would be cancelled and comment "Cancelled as salary structure was deleted or modified" will be shown in the vouchers.

2. Removing the reimbursement head - you can remove this head completely from the salary structure if it has not been claimed by the employee

Example -
Gross Salary          = 200,000
Basic                     = 144,000
Special Pay           =  41,000
Medical Expense  =  15,000

Suppose payroll has been run till September 2015 and today is 15-Oct-2015 and eligibility of Medical Expense of Rs 7,500 has been created.

If we remove Medical Expense from the salary structure then the new structure would be -
Gross Salary  = 200,000
Basic             = 144,000
Special Pay   =  56,000

1. When you remove head and do not change gross salary the amount will be added to Special Pay
   
2. If expense head frequency is multi year and previous year's eligibility is pending to be claimed then on removal head of the head the outstanding amount will be paid in March payroll
   
3. On Payroll > Home > Expenses page this head will not be visible any more
   

3. Increase the Reimbursement head amount - If we want to increase the value of this head from a backdate system will allow us to increase the value from any month in the current financial year. This will be allowed only if any amount in the head has not been paid to the employee

Note -
1. Any change in reimbursement head due to updation of salary structure is visible to employee immediately on Quick Access > Payroll > Expenses page
2. Updated salary details are visible to the employee only after the next payroll after the increment is run and confirmed
3. If flexible benefit head option is activated and flexible benefit declaration window is open then salary revision will not be allowed until the flexible benefit process is cancelled for the employee