Table of Contents
- Salary Structure / Compensation Structure FAQs
- Can Greytip Online handle compensation structure of our company?
- What is a Compensation Structure?
- What are the salary components (heads) that are always present?
- What are Reimbursement components?
- What are the various types of components that make up a payroll structure?
- What are some of the common deductions?
Salary Structure / Compensation Structure FAQs#
Can Greytip Online handle compensation structure of our company?#
Definitely! Greytip Online allows for unlimited salary components. Each component can be configured to be a hand entry component, formula, lookup value, etc. Any compensation structure from the simple to the most complicated can be configured.
What is a Compensation Structure?#
Compensation Structure refers to the various heads (components) under which salary is paid to an employee, and the way in which these heads are calculated.For example, an employee may be paid a salary under the heads: Basic, HRA, Conveyance, etc. Basic may be specified for each user and Conveyance may be Rs. 800 for all employees.
The above (components and calculation methodology) is called as Compensation Structure. Of-course, there will be lot more components and lot more complexity in a real-life compensation structure.
What are the salary components (heads) that are always present?#
In most (Indian) companies, the following components are generally present:
Basic, HRA, Conveyance, Income (Gross), PF (Provident Fund), IT (Income Tax), Deductions and Net Pay.
What are Reimbursement components?#
Reimbursements are a special set of components that are part of the payroll. This is typically introduced in the payroll to save tax. (Tax is to be paid by every employee to the government. The amount of tax is based on the income earned by the employee).As the word suggests, reimbursements are money paid to you for some money that you have already spent. For e.g. A common reimbursement item is "Medical Reimbursement". This indicates that if you spend some money on medical expenses (medicines, doctor charges, etc), then the company will reimburse (pay) you for the amount spent by you. Another common reimbursement is LTA (Leave Travel Allowance)
All reimbursements are subject to upper limits. What this means is that you can claim (request for payment) reimbursements only upto a certain limit. If your Medical Reimbursement limit is 15000, then you can only claim upto 15000.
The process of asking for payment of a reimbursement is called as making a reimbursement claim.
What are the various types of components that make up a payroll structure?#
Every payroll compensation structure consists of at least income or deduction components.
| Component Type | Description |
|---|---|
| Income | Income components are all heads under which salary is paid. For example: Basic, HRA, Conveyance, Special Allowance. |
| Deductions | Deductions refers to amounts that is cut/withheld from your salary. For example: PF, ESI, PT, IT |
| Reimbursments | |
| Calculation fields | Sometimes, we need many salary components for intermediate computation or for reporting purposes. These components are typically referred to as "Calculation Fields". These do not appear in payslip, but we use them for reporting or other requirements. |
What are some of the common deductions?#
Some common deductions are:PF, ESI, PT, IT, Loans, Salary Advance recovery, Canteen Deduction, Notice Pay, Other Deductions, etc