Salary Structure in ERPNext

A Salary Structure is the detailed compensation package an Employee or a Position will be receiving from the company. In here, you can define what are the salary components applicable to a certain employee or position.

Since compensation packages are not the same for all employees, you may define as much Salary Structure as needed. Later on, these can be assigned to the employees as required during payroll processing.

To create a Salary Structure:

  1. Login to ERPNext
  2. Go to Human Resource. Under Payroll, click Salary Structure
  3. Click New to create a Salary Structure.
  4. On the header, enter the following information.
    • Name - Name of the Salary Structure (Example: Supervisor SS)
    • Company - Name of the Company
    • Is Active - Select if either Yes or No
    • Payroll Frequency - Select the number of payout per month

5. On the Earning and Deduction section, you can enter the Salary Components that will be included in this Salary Structure. Click on “Add Row” on each table to add a Salary Component. Take note that if there is an Amount defined on the Salary Component, it will be the default Amount once the Salary Component is assigned to a Salary Structure.

6. Once all applicable components have been added, click Save.

7. Click Submit to finalize the creation of the Salary Structure.

For Hourly Rate employees or those salaries that are based on submitted time sheet, follow these steps.

  1. Create a new Salary Structure.
  2. Tick the Salary Based on Timesheet box.
  3. Select the Salary Component and enter the Hourly Rate.
  4. Enter the Max Benefit Amount if applicable. If hours under the Max Benefits amount will be paid.
  5. If employee will use leaves for days with no attendance, enter the maximum encashment amount on “Leave Encashment Amount Per day” field.

6. Click Save to apply the changes.

7. Click Submit to finalize the creation of the Salary Structure.

Note: Once Salary Structures have been created, it may now be assigned to Employees using the Assign Salary Structure or Assign to Employee buttons.