Payroll
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The document discusses OpenERP's hr_payroll module which provides features for payroll management including employee management, payslips, payroll registers, leave management, overtime, allowances, deductions, and bank advice generation. It describes how to install and configure the module including setting up holiday statuses, allowance/deduction heads, employee functions, employee contracts, and accounting integration. The module allows automatic payroll processing and reporting including payslips, payroll registers, bank advice, annual salary reports, and annual employee payroll reports.
Payroll
- 1. Payroll Management OpenERP Payroll Generic Payroll System Page 1 of 14
- 2. Payroll Management Introduction OpenERP supports various costing methods for the employee, and invoicing from the direct employee working time and tasks using the various techniques like Time sheet, Time Sheet from Project Task but it is not providing the management for the payment of Employees and structured management of the same. Now a new module available in OpenERP called hr_payroll that will provide featured to allow user to do same. It provides the features like all other basic Payroll Management system, employee management, payslip, payroll register, leave management, over time, managing various allowance and deductions, bank advice, and many more features. This module will automatically fits in to the existing hr system easily with few configurations. Installation hr_payroll module available on the trunk-extra-addons branch. lp:~openerp-commiter/openobject-addons/trunk-extra-addons/ Take a module from the branch and install it as like the other modules, also please take all the dependencies from the same branch, it may also required the module like hr_contract, hr_holidays, and hr_expanse, as these module are integrated with the hr_payroll module to manage the everything to gather in payroll. Configuration Configuration process is very easy and need to configuration according to requirements. There are lots of things need to configure we will see hare one by one. • Holiday Status • Allowance/Deduction Heads • Employee Functions • Employees • Accounting • Employee Contract • Holidays Per Employee Above are the few master configuration that we need to do before we start the Payroll Procedures every month, we will get the reports every month and every year are as follows Payslip, Pay register, Bank advice, Yearly Salary Report, Yearly Employee Payroll Report. Page 2 of 14
- 3. Payroll Management Allowance/Deduction Heads This is the most important features of the Payroll to provide generic configuration for any State or Country according to the rules and company policy. There are pre-install heads are given you can change the or add/remove according to the requirements basically it deals with the employee salary to classify for the allowance, deduction and others. Here is a configuration for the House Rant Allowance, it coded as HRA, and type is allowance. Basically all allowance deduction are based on the basic salary but some time special allowance can be based on the other amount rather then the basis in that case Based on field are use to compute the base amount for further calculation. Some times it also important to check some condition before applying the allowance or deduction. Contribution configuration is mainly used when the depending on the employee deduction company have to contribute the same, like Provident Fund. If contribue by company is true then company will overhead by the contribution expanse, and if Included in salary is true then company contribution part is also deduct from the employee salary itself. It is possible if company defines the package including all or CTC (Cost to company). Page 3 of 14
- 4. Payroll Management Holiday Status This configuration is again depending on the company policy. Like most of companies are giving CL – Paid Leaves, ML – Half Paid Leaves, and UPL – Un-Paid Leaves. So in company, yes some time companies also give the Basic Pay leaves too, but mainly 3 type if Leaves are there. Paid, Half Paid and Un-Paid. Important things for payroll configuration is Payroll Configuration Section. There we need to define Payment Conditions. There can be Paid, Half Paid and Un-Paid. Then important fields is account in which cost for the paid leaves are calculated. Also we can track the analytic accounting for the holidays by defining the analytic account, and need to define this under which Allowance/Deduction head. You can configure the holidays status as like follows. Where Paid Leaves are Full Paid, Medical Leaves are Half Paid and Unpaid are Unpaid Leaves. If we implement Basic pay leaves then it is also possible to configure the Basic Pay leaves in OpenERP. Employee Functions Employee function are mainly related to Employee Designations, or role of the employee in company, and it is very much important to define all employees role in company. Like any Service based company following are the main designations. Application Engineer, Service Engineer, Junior Engineer, Sr Application Engineer, Team Leader, Marketing Executives, Marketing Managers, Account Officer, HR Manager, HR Page 4 of 14
- 5. Payroll Management Executives. Team Leaders, Project Managers, Department Heads, Managing Directors, CEO's etc. so according to the job profiles we need to configure the salary for all employees so its good to once define job profile and also configure the profile allowance and deductions. Here is an example for the software service based company, look at the list of designations. Now look at the Salary structure for the an Application Engineer Profile. There are list of allowance and deduction lines, important configuration are Analytic account on Employee Function it will allow to do analysis for Application Engineer Salary expanse. But it will not allow to do analysis for every type of allowance and deductions heads. For that we need to configure Analytic account for every line, if any of the line not define then it will follow the root analytic account. Name and code are use to define the name and code for the allowance and deductions. Then important are Amount type and amount and type. Amount type can be Fixed Amount or Percent (%), according this amount is defined, like for house rent we have to define 30% of basic so we have to select Amount Type = Percentage %, and amount = 0.30. then type is define for the type of line, it can be Page 5 of 14
- 6. Payroll Management Allowance, Deduction, Loan, Leaves, Advance and for any other type of Payment or Deduction Other is used. And next 2 fields Category where we need to select the allowance / Deduction heads and in General Account we need to select the Account for expanse and Payable entry encoding, like All allowance are expanse for the company so its better to encode all in separate account to track easily. For all deduction is not an income for the company but its actually payable amount to government or some other company. Like Provident Fund its deduction from the Employee but it should be payable to some bank account so when we pay its again encoded as an expanse for the company. So General accounting configuration is important to manage the automatically all payroll entries to Account management. So we need to configure all Employee functions for the basic salary structure carefully depending on the govt rules and also company policy. Also its configurable to it can be changed at any time depending on the requirements. In OpenERP salary structure can be defined in 2 ways, one which we have seen just now based on Employee Functions and 2nd we can configure salary structure separately for all employees which is not functionally correct but its possible. Also we can configure like common structure + special allowance/deduction for employees, we will see this feature in detail when we see employee configuration. Employee Employee is most important configuration, for payroll system there are lots of changes in the employee normal form, please have a look at the configuration billow. For understanding better we divide the employee configuration in 3 parts. • Informations • Payroll • Accounting Informations fields are mainly used to store the informational data's like Employee name, Bank Account no, PAN Card, etc.. Payroll configuration data are used to payroll calculation, and Accounting Configuration are used to configure the accounting information to link between the Payroll and Accounts. Billow views there are almost all fields are self explanatory, like name, company, user, Bank Account No, Home Address, Phone, Email, etc. For Payroll module important field is Home Address, as employee directly related to the Partner through Address so address must also related to the Partner in order to relate Employee with Partner. So all accounting reports is working for the partner so same report will work for the employee too. Page 6 of 14
- 7. Payroll Management Now look at the screen billow, its important configuration for informational fields and payroll configurations fields. Like PAN card Provident fund Account No, ESI Account No, etc. Important is Special Allowance Deduction lines, like here employee suggest to deduct the Tax from his salary every month. So that at the end of year no more tax payment will be remains, as like the same we can add allowance line for the marketing people for Incentives. Here need to add functionalities like start date and end date to restrict calculation for certain period of time. Now lets see next screen for most important configuration that will define basic / net salary for employee for specific period of time, so Page 7 of 14
- 8. Payroll Management that we can track all increment and changes in to the contract depending on the work and designation changes. Employee Jems Scots, appoint from the first 1st of July 2008 and he was get reviewed on the 30th June for according to his performance he get appraiser and get promoted to the Application Engineer with increment of 6000. here configuration are something like all salary which is given to employee that is 18,000 and all allowance and deduction are applicable in that so in all case payable salary will not be increased more then 18,000 which is already defined. In most of other payroll we need to first define basic salary then based on that system will apply the allowance an deductions which is also supported in hr_payroll module but as a special feature it also computer basic salary based on the net salary and salary structure, so this will be a good features to configure contract easily. Have a look at the contract detailed configuration. So Depending on the Wage Type salary will be applicable including all or basic Salary. Page 8 of 14
- 9. Payroll Management Now look at important feature of employee that provide accounting configurations. Bank Account is provide information that from which bank account of company, employee will get paid. Salary account is used to encode the expanse for basic salary of employee, and Employee Account is used to encode payable salary for employee. Its better to select the same account here partner Payable account, or else if you want to keep the separate account for employee salary then we can create a new account for employee. After configuration all above payroll system we will be able to print Employee Salary structure will be necessary details which can be used to provide with the increment letter for further use, have a look next page for full detailed report. Page 9 of 14
- 10. Payroll Management Page 10 of 14
- 11. Payroll Management Payroll Register – Monthly Process Payroll register is mainly group all employee payslip for the specific month, so that all employees payslip can be track easily in pay register, and also company records can become systematic. Look at the above screen, important fields are date it will computer all employees salary according to the selected date in register, it will take care for Holidays, Contracts based on the dates, so we can prepare a slip for old dates also once we configure all old contract and holidays for all employee. Register displays the total of Allowance, Deduction, and based on that Grows and Net Salary respectively. Payslip is fully integrated with the workflow and same flow is called from the Payment Register for all Salary slips. Once register is confirmed it will automatically create a bank payment advice and we can also take the print of Register and bank advice as follows have a look at reports. Page 11 of 14
- 12. Payroll Management Page 12 of 14
- 13. Payroll Management Page 13 of 14
- 14. Payroll Management Payslip every month we can take a print of the salary slip from the system for all employees as shown billow. Note : Need to change few things in report. Page 14 of 14