Salary Settings

📌 Overview: Salary Settings define how salaries are calculated, how weekends are treated in payroll, and how Professional Tax is deducted. The Salary Settings page lets you configure the calculation method, the weekend pattern, and the Professional Tax slab table for your organization. These configurations directly impact employee salary generation, payroll accuracy, and statutory deduction reporting.

📍 Screen: Open Settings → Salary. The page opens in read mode by default — click the Edit button in the aside header (top-right) to switch to edit mode. The same page is reused inside the Setup Wizard’s Salary step, so saving in either place produces the same result.

🧮 Salary Calculation Options

Under the Salary Calculation section, the Calculate Based On radio offers two methods:

• 1️⃣ Month Days — Salary is calculated based on the total number of calendar days in the month. All days are considered paid days, including weekends and holidays (unless unpaid leave is applied). Example: for January 2025, the system considers 31 days as the total payable days. Saturdays, Sundays, and holidays all count as paid days.
• 2️⃣ Working Days — Salary is calculated based on only the working days of the month. Weekends and holidays are excluded from total payable days. Per-day salary is derived from the remaining working days. If an employee takes unpaid leave, the deduction happens per working day, not per calendar day.

⚠️ IMPORTANT — Sandwich Rule & Salary Calculation: If you switch salary calculation to Working Days, the Sandwich Rule must be turned off in Settings → Leaves. The system will block the save with the warning “Sandwich Policy is only applicable when salary is calculated based on total month days, not working days” if both are on at the same time.

• Month Days → Sandwich Rule can be enabled or disabled.
• Working Days → Sandwich Rule must stay disabled.

📌 Example Calculation:

• Employee: Mr. Ramesh
• Monthly Salary: ₹30,000
• Salary Calculation Method: Working Days
• Month: January 2025
• Weekends: 4 Sundays + 4 Saturdays (8 days)
• Holidays: 1 national holiday (26th Jan)
• Total Days in January: 31
• Working Days = 31 − (8 weekends + 1 holiday) = 22 days

👉 Per Day Salary = ₹30,000 ÷ 22 = ₹1,363.64. If Mr. Ramesh takes 1 unpaid leave on 1st Jan → Deduction = ₹1,363.64.

Final Salary = ₹30,000 − ₹1,363.64 = ₹28,636.36

📅 Weekend Setup

The Weekend Details section defines which days are treated as weekends (non-working days) for salary and attendance calculation. Add one row per weekday you want to mark as a weekend.

1. Day: Choose which day is a weekend (e.g., Sunday, Saturday, Friday). Each weekday can only be picked once — the dropdown automatically removes days you have already added on other rows.
2. Occurrence: Define how often the weekend applies:
   1. All Weeks — every week of the month.
   2. 1st & 3rd — weekend applies only on the 1st and 3rd week.
   3. 2nd & 4th — weekend applies only on the 2nd and 4th week.
3. Use Add New Weekend to add another row, or Remove to delete a row.

Example — every Sunday off:

• Day Selected: “Sunday”
• Occurrence: “All Weeks”
• Effect: Every Sunday in the month is treated as a weekend (non-working day).

👉 So in the scenario above for January 2025, all Sundays — 5 Jan, 12 Jan, 19 Jan, and 26 Jan 2025 — will be marked as weekends.

✅ With these settings, your payroll stays aligned with your organization’s weekend and leave policies.

⚙️ System Impact

• Impacts salary computation during payroll generation.
• Does not affect past runs — only future salaries.
• Weekends are also shown in the Calendar and Dashboard Announcements.

🧾 Professional Tax Settings (Slab-Based)

Professional Tax (PT) is now slab-based — you maintain a table of salary brackets and the rupee amount of PT that applies to each bracket. The system picks the matching slab automatically when calculating each employee’s monthly salary, and posts the deduction to the employee’s PayrollCredit record for that month (along with PF and ESIC).

📍 Screen: The Professional Tax Settings table sits at the bottom of the Salary Settings page. Each row represents one slab. Use Add New Slab to add a row and Remove to delete a row (both buttons are visible only in edit mode).

Each slab row has three fields:

📌 Example slab configuration (Maharashtra-style):

💡 Tip — Slabs vs. Default Flat Amount

• If you leave the slab table empty, the system shows the message “No slabs configured. The system will use the default flat amount from Codes table.” and falls back to the global default PT amount.
• To use slab-based PT (recommended), add at least one slab row.
• Make sure your slab brackets are continuous — gaps between brackets can leave employees outside every slab and skip the deduction.

⚠️ Where the deduction lives: The PT amount is no longer stored on the Expense table. It lives on each employee’s monthly PayrollCredit row alongside PF and ESIC, and it is strictly per month — there is no carry-forward of unpaid PT into the next month. You can pay each month’s PT independently from the Liability → Professional Tax tab.

🩺 Statutory Coverage Notes

📌 ESIC threshold: ESIC is calculated only for employees whose monthly wage is up to ₹21,000, in line with the ESI Act 1948 coverage rule. Employees above the threshold are skipped from ESIC, while PF and PT continue to apply per their own rules.

📌 TDS — multiple records per employee: An employee can now have multiple TDS records (one per financial year, plus prior-employer figures). TDS configuration itself lives on the Employee aside, not on this page — but it shares the same statutory deduction pipeline as PT and ESIC. See the Salary & TDS documentation for details.

✅ Best Practices

• Use Working Days if you want strict attendance-based payroll. Confirm the Sandwich Rule is OFF in Leaves Settings before saving.
• Use Month Days for a fixed-month salary approach where weekends are paid.
• Double-check weekend rows for accuracy — a missing day means it will be treated as a working day in salary generation.
• Configure the Professional Tax slab table once during setup; review it whenever your state notifies a slab change.
• Keep slab brackets continuous (no gaps) so every salary value falls into exactly one slab.
• Save Salary Settings before generating salary for a new month — changes do not apply retroactively to already-generated salaries.