Earnings Master

Earning Master

Earning Master interface is used to define earning heads and configure how the earning head calculations will be done. Pay Structure Definition is the controlling interface where applicable earning heads have to be tagged. If an earning 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 earning heads include Basic, HRA, Conveyance Allowance, Overtime, Leave Encashment and Bonus.

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

Code: Enter a short name for the earning head.

Description: Provide a description for the earning head.

Identification: Pre-defined identifications have been provided in Farvision. For some earning 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 earning heads like Reimbursements, Gratuity, Overtime, LTA are covered individually. Most of the other identifications have an impact on Income Tax computation.

Identification	Earning Head	Used for
Basic	Basic	HRA, Gratuity, Leave Encashment, etc are dependent of Basic
HRA	HRA	Used in computation of Income Tax, PF, etc
Conveyance Allowance	Conveyance Allowance	Computation of Income Tax
Education Allowance	Education Allowance	Computation of Income Tax
Others	Any other head not in this list, example Staff Welfare, Sales Incentive, Special Allowance	No special treatment or has no Impact in any calculation
Leave Encashment	Leave Encashment	Auto leave encashment calculation
Bonus	Bonus	For Bonus generation from Bonus Menu
Dearness Allowance	Dearness Allowance	Computation of Income Tax, PF, etc
Ex-Gratia	Ex-Gratia	Ex-Gratia is used when not covered under the Bonus Act
Notice Period	Notice Period	Notice Period Payment
Education Reimbursement 1'st Child	Education Reimb. 1'st Child	Computation of Income Tax
Education Reimbursement 2'nd Child	Education Reimb. 2'nd Child	Computation of Income Tax
Hilly Allowance	Hilly Allowance	Where transportation is limited, Computation of Income Tax
LTA	LTA	Computation of Income Tax
Phone Bill	Phone Bill	Reimbursement calculation
Round off Brought Forward	Round off Brought Forward	Payslip calculation
Gratuity	Gratuity	Gratuity calculation
Overtime	Over Time - Normal, Over Time - Holiday	Overtime calculation
Reimbursement	Petrol, Phone, Medical, Meal Vouchers	Reimbursement calculation

Reimbursements

Some examples of earning heads which are reimbursed by the employer as listed below.

Earning Heads	Identification	Method	Is Reimbursement	Is CTC head
Petrol	Reimbursement	Payslip	Yes	Yes
Driver	Reimbursement	Payslip	Yes	Yes
Medical Bill	Reimbursement	Outside Payslip	Yes	No
Conveyance Expense	Reimbursement	Outside Payslip	Yes	No

If Reimbursement is a part of CTC, then Reimbursements are processed through the Reimbursement form. Reimbursement can also be paid as a variable amount which may or may not be the part of CTC.

Method: Payout of earning heads can be done through Payslip or Outside payslip. Payments which are fixed in nature and/or part of CTC are usually paid through payslip. Payments which are variable in nature, for example reimbursements on actual basis or incentives are normally paid outside payslip, i.e. through voucher payment.

Payment through Payslip

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

Earning Heads	Identification	Method
Basic	Basic	Payslip
HRA	HRA	Payslip
Conveyance	Conveyance	Payslip
Child Education Allowance	Education Allowance	Payslip
Site Allowance	Other	Payslip
Petrol	Reimbursement	Payslip
Leave Encashment	Leave Encashment	Payslip
LTA	Leave Travel Allowance	Payslip
Bonus	Bonus	Payslip

Outside Payslip

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

Earning Heads	Identification	Method
Gratuity	Gratuity	Outside Payslip
Sales Incentive	Other	Outside Payslip
Conveyance Expense	Reimbursement	Outside Payslip

CTC Applicable: If this option is checked then the earning head will appear in the Yearly CTC entry screen where CTC of employees is defined. Normally variable earnings are not part of CTC, the rest depends on the company policy.

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

Carry Forward: This is only available in case the earning head is a reimbursement. If checked, the eligible but unpaid monthly reimbursement amount can be carried forward for payment in future months.

Maximum Limit: This is only available in case the earning head is a reimbursement. Maximum amount entitled or eligible for the reimbursement earning head can be defined here. Employee wise maximum limit for that can be reimbursed is defined through the CTC of the employee.

Tutorial: Creating Earning Master