Deduction Master

Deduction Master

Deduction Master interface is used to define deduction heads and configure how the deduction head calculations will be done. Pay Structure Definition is the controlling interface where applicable deduction heads have to be tagged. If an deduction head is not tagged in the Pay structure definition, it will not be available for use anywhere else in Farvision payroll.

Examples of some common deduction heads are mentioned below:-

Deduction Heads

ESIC

P.Tax

I.Tax

Advance

VPF

Other Deduction

Deduction heads are used for the purpose of payroll processing.

Code: Enter short name of the new Deduction head

Description: Enter the description of the deduction head

Identification: Pre-defined identifications have been provided in Farvision. For some deduction head there is a special treatment and it has to be tagged to the specific Identification so that calculation can be done as per requirement. More details of the processing of some deduction heads like Provident Fund, ESIC, Income Tax, Professional Tax which have an impact on deduction as per compliance and also in Tax Computation.

Identification	Deduction head	Used for
Provident Fund	PF	Statutory Deductions as per Act. (Based on formula & Statuary Limit), Basic
ESI Contribution	ESIC	Statutory Deductions as per Act. (Based on formula & Statuary Limit), Gross Components
Professional Tax	P Tax	Statutory Deductions as per Act. (Gross Components)
Income Tax	I Tax	Statutory Deductions as per Act. (Based on formula for taxable components), Gross Taxable components
Advance	Advance	Installment/Amount Based Advance given to employees against Salary
Additional P.F	VPF	Voluntary Provident Fund/Additional PF deduction
Notice Period	Notice Period Deduction	Notice Period Deduction
Loan	Loan Principal	Principal head amount calculation
Interest on Loan	Loan Interest	Interest head calculation
Life Insurance Premium (LIC)	Life Insurance Premium (LIC)	LIC entry screen as a deduction head
Advance Adjusted against Bonus	Advance Adjusted against Bonus	Giving advance against the Bonus
Phone Bill Deduction	Phone Bill Deduction	Phone bill exceeding limit
Other	Other deduction	Any Deduction head not covered in this list
Sri Lanka Tax	Sri Lanka Tax	Tax used in Sri Lanka
R. Carry Forward	R. Carry Forward	Rounding off carry forward (for deduction)
Round Off	Round Off	Differential round off
Facility	Facility	Amount which is part of employee CTC, but not paid directly to employees against the facility given

Method: Deduction heads can be done through Payslip or Outside payslip. Deductions which are fixed in nature and/or part of CTC are usually done through payslip. Deductions which are variable in nature, for example reimbursements on actual basis or miscellaneous deductions are normally done outside payslip, i.e. through voucher method.

1. Payslip

Deduction heads which are tagged with Payslip method will be shown in the payslip. Deduction heads which have variable values and may or may not be a part of CTC can be deducted through payslip mode. If the variable amount has to be shown as a deducted part of salary, then use this mode else use the outside payslip mode.

Deduction Heads	Identification	Method
PF	Provident Fund	Payslip
ESIC	ESI Contribution	Payslip
P.Tax	Professional Tax	Payslip
Income Tax	Income Tax	Payslip
Advance	Advance	Payslip
Loan Principal	Loan	Payslip
Loan Interest	Interest on Loan	Payslip
Additional PF	Additional P.F.	Payslip
Life Insurance Premium (LIC)	Life Insurance Premium (LIC)	Payslip
LWF	Other	Payslip
MISC Deduction	Other	Payslip

2. Outside Payslip

If the method is Outside Payslip, deduction will be made through voucher. If payment requisition option has been activated, the payment requisition for each deduction head will be automatically sent for receipt through voucher in the Finance module. The deducted amount outside payslip is entered through the Outside Payslip variable.

Deduction Heads	Identification	Method
Electricity Bill	Other	Outside Payslip
Food Bill	Other	Outside Payslip
Notice Period Deduction	Notice Period	Outside Payslip

Effective From: This option denotes the specified date from which the deduction Head is applicable. Any CTC prior to this date will not get this head for selection. Also editing of deduction master cannot be possible in payslip generated months, and it needs to be changed effective from next payslip generated month.

Serial Number: A serial number is automatically generated for each deduction head. Serial numbers determine the sequence in which the deduction heads will be displayed in the Payslip and Final Settlement.

Tutorial: Creating Deduction Master