Payroll is a process of maintaining records of employees’ salary under various pay heads, attendance & absent records, all benefits & deductions. Just like we create individual ledgers for the debtors and creditors, we need to create ledgers for an individual employee or department-wise employee groups.
Employees & Employee Groups:
The first step in the payroll process will be creating employees & employee groups. Creating employee groups will be optional. If your company has different departments, then you can create employee groups as per departments.
Steps to create employee groups in Tally Prime:
1] Go to Gateway of Tally > Create > Payroll Masters > Select Employee Group > Press Enter
2] Enter the name of the department. (Purchase/Accounts/Sales/Marketing/HR)
3] Select No in the Define salary details option. Press enter to accept.
Create separate group for each department under Primary head.
Steps to create employees in Tally Prime:
1] Go to Gateway of Tally > Create > Payroll Masters > Employee > Enter
2] Enter the name of the employee, his date of joining, and define salary details. Defining salary details is optional. 3] You will see General Information & Statutory Details column there. Enter all the required details. Make sure to fill correct details.
4] Create the employee ledger for every employee working in your company. Enter the statutory details carefully to avoid any errors while filing returns or generation challans for PF/ESI etc.
Units:
Unit refers to the unit of measurement based on which pay heads are calculated. Basic salary, HRA, DA are some of the pay heads on basis of which we process salary and the calculation of this salary is based on units – days, weeks, and months. These units are known as Payroll Units & they are available in tally by default. We are not required to create them separately.
In Tally, we can create two different types of units viz. Simple Unit & Compound Unit. A compound unit is a combination of two simple units. Days, weeks, and months are simple units. In some companies, employees get paid on an hourly basis or some of the employees get paid for the extra hours they worked apart from their regular working hours i.e. overtime. To calculate these hours we need to create compound units.
Steps to create Simple Unit in Tally Prime:
1] Go to Gateway of Tally > Create > Payroll Masters > Units (Work) > Enter
2] Select type of unit as Simple.
3] Enter symbol for the unit. For example – HRS for Hours.
4] Add formal name of your unit.
5] Select Not Applicable in Unit Quantity Code (UQC). 6]Set number of decimal places as 2.
Steps to create Compound Unit:
1] Go to Gateway of Tally > Create > Payroll Masters > Units (Work) > Enter
2] Select type of unit as Compound.
3] Select the first unit from the Units list.
4] Add conversion factor in Conversion column.
5] Select the second unit.
6] Press enter to save and accept the unit.
Here the first unit is HRS (Hours), the conversion factor is 60, and the second unit is Mins (Minutes). You can use this compound unit while recording overtime attendance.