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Manage Pay Elements

Define earnings and deduction components used in payroll calculations. Each pay element represents a line item on an employee's payslip (e.g., Basic Salary, House Rent Allowance, Income Tax deduction).

Fields

Element Code - Short code identifier
Element Name - Descriptive name (e.g., "House Rent Allowance")
Element Category - Basic, Allowance, Deduction, Employer Contribution, Statutory Deduction, Bonus, or Reimbursement
GL Account - Account where earnings/deductions are posted
Employer Account - GL account for employer contribution (optional)
Element Type - Earnings or Deduction
Amount Type - How the amount is calculated (see below)
Default Amount - Base amount or rate used for Fixed, Percentage, and Attendance-Based types
Formula - Arithmetic expression (required when Amount Type is Formula)
Taxable - Whether this element counts toward taxable income
Affects Gross - Whether this element is included in GROSS calculations
Minimum Amount / Maximum Amount - Optional bounds on calculated values
Display Order - Ordering on payslip

Amount Types

The Amount Type determines how each element is calculated during payroll:

Type	Code	How It Calculates
Fixed Amount	0	Uses the Default Amount directly
Percentage of Basic	1	Default Amount (as %) x Basic Salary / 100
Percentage of Gross	2	Default Amount (as %) x Current Gross / 100
Formula	3	Evaluates a custom formula expression
Attendance Based	4	Default Amount x (Days Worked / Working Days)

Formula Amount Type

When Amount Type is set to Formula, the system evaluates the expression in the Formula field using the payroll formula engine.

Formulas are arithmetic expressions that can use built-in variables:

Variable	Description	Example Value
`BASIC`	Employee base salary for the period	5000.00
`GROSS`	Basic + all earnings calculated so far (cascading)	5500.00
`DAYS_WORKED`	Actual days worked (from attendance)	20.0
`WORKING_DAYS`	Total working days in period (excl. weekends/holidays)	22.0
`DAYS_IN_MONTH`	Alias for WORKING_DAYS (compatibility)	22.0
`OVERTIME_HOURS`	Total overtime hours in period	8.5
`UNPAID_LEAVE_DAYS`	Days of unpaid absence	2.0
`HOURLY_RATE`	BASIC / WORKING_DAYS / 8	28.41

Supported operators: + - * / % (modulo) and parentheses ( )

Variables are case-insensitive (basic, Basic, and BASIC all work).

Formula Examples

Pay Element	Formula	Explanation
House Rent Allowance	`BASIC * 0.10`	10% of basic salary
Dearness Allowance	`BASIC * 0.05`	5% of basic salary
Conveyance Allowance	`BASIC * 0.08`	8% of basic salary
Overtime Pay	`HOURLY_RATE * OVERTIME_HOURS * 1.5`	1.5x overtime rate
Absence Deduction	`(BASIC / WORKING_DAYS) * UNPAID_LEAVE_DAYS`	Deduct per absent day
Performance Bonus	`GROSS * 0.10`	10% of total earnings so far
Leave Encashment	`(BASIC / WORKING_DAYS) * DAYS_WORKED`	Pro-rata by attendance

Cascading GROSS Behavior

The GROSS variable is recalculated after each component. This means later elements can reference the cumulative total of all prior earnings:

Basic Salary: 5000 -> GROSS = 5000
HRA (BASIC * 0.10): 500 -> GROSS = 5500
Bonus (GROSS * 0.05): 275 (5% of 5500) -> GROSS = 5775

This cascading behavior lets you build complex salary structures where components depend on each other.

Formula Priority (Three-Level Override)

Formulas can be defined at three levels, with the most specific taking precedence:

Employee Override (highest priority) - Personal formula for a specific employee
Salary Structure (mid priority) - Formula for a specific job grade/position
Pay Element Default (lowest priority) - Fallback formula used when no override exists

Example: The HRA element might default to BASIC * 0.10, but the "Senior Manager" salary structure overrides it to BASIC * 0.15, and a specific employee might have BASIC * 0.20.

Error Handling

Invalid formulas silently return 0.00 (no error displayed)
Division by zero returns 0.00
Only numbers, operators (+ - * / %) and parentheses are allowed (all other characters are rejected for security)
The formula used for each payslip line is recorded in the audit trail

Tips

Test formulas by creating a test payslip and reviewing the calculated amounts
Use parentheses to control calculation order: (BASIC + 500) * 0.10 differs from BASIC + 500 * 0.10
The Display Order field controls the sequence in which elements appear on the payslip and the order in which GROSS is accumulated

Manage Pay Elements