Complex Payroll Request

Great work has been done in the payroll to be released in 7.1.REQUESTS.Firstly,can we please make allowance for the variation of the rate payable to an employee in case of time sheet based payroll.Take for an example a staff of a company X works at various project sites of company project A ,B and C.In a particular month he worked for 14 days in a site A at the rate of $80 per day,he worked for 8 days in site B at the rate of $100 per day and spent the remaining 4 days in site C at the rate of $135 per day.I know you can add more than one time sheet but i am not sure whether different rate is possible.If is not possible,we would request such feature should be added
Secondly,we would also request that it should be made possible that formula can be written on the output of salary calculation to determine one of the salary component.Take for example a staff that has the following salary component: Basic $2,000,HRA $800,Transport $700 .Gross Pay is therefore $3,500.To get his net pay the only deduction which is Personal Income Tax must be calculated.Information needed to calculate his personal income tax are as follow:
$1,200 + 10%of his gross income is declared as not taxable while the remaining balance of his gross income (in this case it is $1,950 i.e $3,500-($1,200+0.1*$3,500)) is subjected to prorated tax as follows:
First $500 at the tax rate of 7% which equal $35
second $500 at the rate of 10% which equal $50
First $1,000 at the rate of 20% which equal $190 (i.e 0.2*$950 )since balance is not up to $1,000 you take the balance.
In this case the Personal Income Tax payable by the staff is $275 (i.e 35+50+190).
The Net Pay of the staff is Gross ($3,500) minus Personal Income Tax ($275) which equal $3,225.
The question is this can we write a formula to calculate this $275:The Personal Income Tax in this New Improved Salary Structure?
Earnestly waiting for positive reply
Thanks
Fred

1 Like

One more request.In loan management,presently the configuration in both erpnext 7.0 or in the proposed 7.1 is not tidy.Take for example where you have 300 staff in an organisation and 100 of them take loan.Does it mean that loan account has to be created for them individually in the chart of accounts.That will make the chart of account look very untidy.
SOLUTION
Good enough in the yet to release 7.1 there is provision for default account in Salary Component but the only limitation is that the default account although permit you to select debtors account but does not allow you to select the party.If the party is selectable the problem of loan management in ERPnext would be completely solved.HOW?
1.Each staff that take a loan will be created as a debtor (under a debtor group called Staff Loan) .With journal entry, the staff account can be debited and the bank credited.
2.In the staff salary component,the loan deduction component is linked to staff loan account created as debtor while the interest element is linked to interest account.So when salary is paid the loan is deducted automatically.With this the chart of account will look tidy.
REQUEST:Kindly add a column of Party by default to the Default Account of Salary Component.

@Fred1 Thanks for your feedback. it would be really nice if you can format your comment and break it into points with numbered lists, headings. Right now its really hard to read your text and understand what you are trying to say!

CC @KanchanChauhan

Thanks.I will break down topic by topic

1 VARIATION OF HOURLY RATE
presently and in the proposed 7.1 the salary structure that has salary slip based on time sheet has only one rate that can be defined for the staff although it is possible to attach more than one time sheets but all of the time spent by the staff will by default be multiplied with his fixed hourly rate.This is a great limitation in calculating the staff salary where a staff works in a particular month in two project sites and he is paid different hourly rates in the two sites since there is no allowance presently to vary the staff hourly vis-a-vis the timesheet

EXAMPLE
.Take for an example a staff of a company X works at various project sites of company project A ,B and C.In a particular month he worked as follows
Project No of day worked Rate
A 14 $80
B 8 $100
C 4 $135

In case like this how would the time sheet be linked to his salary structure?

REQUEST
Make allowance for change in hourly rate in salary structure Or make it possible for a hourly rate to be defined for each timesheet that is to be used in salary calculation

2 COMPLEX FORMULA ON A SALARY COMPONENT

Is it possible to write a formula for personal income tax calculation as described below
EXAMPLE
.Take for example a staff that has the following salary component:
Basic $2,000,
HRA $800,
Transport $700 .
Gross Pay $3,500.(CTC)
To get his net pay the only deduction is Personal Income Tax which must be calculated.
Information needed to calculate his personal income tax are as follow:
(a) $1,200 + 10%of his gross income is declared as not taxable .
(b) the remaining balance of his gross income $1,950 (i.e $3,500- ($1,200+0.1*$3,500)) is subjected to prorated tax as follows:
© First $500 at the tax rate of 7% which equal $35
(d) second $500 at the rate of 10% which equal $50
(d) First $1,000 at the rate of 20% which equal $190 (i.e 0.2*$950 )since balance is not up to $1,000 you take the balance.

In this case the Personal Income Tax payable for the staff is $275 (i.e 35+50+190).
MY QUESTION
Can a formula be written to calculate this personal income in the erpnext 7.1

3.LOAN MANAGEMENT CONFIGURATION

In loan management,presently the configuration in both erpnext 7.0 or in the proposed 7.1 is not tidy.how?
EXAMPLE
Take for example where you have 300 staff in an organisation and 100 of them took loan.Does it means that loan account has to be created for them individually in the chart of accounts.That will make the chart of account look very untidy.
SOLUTION
Good enough in the yet to be released 7.1 there is provision for default account in Salary Component but the only limitation is that the default account although permit you to select debtors account but does not allow you to select the party.If the party is selectable the problem of loan management in ERPnext would be completely solved.HOW?
1.Each staff that takes a loan will be created as a debtor (under a debtor group called Staff Loan) .With journal entry, the staff account can be debited and the bank credited to record the loan.
2.In the staff salary component,the loan deduction component is linked to staff loan account created as debtor while the interest element is linked to interest account.So when salary is paid the loan is deducted automatically.With this the chart of account will look tidy.

REQUEST:Kindly add a column of Party by default to the Default Account of Salary Component.
Earnestly waiting for positive reply
Thanks
Fred

1 Like

Hi,
Does anyone here, implemented the Employee Loan structure. Please support me if anyone implemented it.

@nandeep The team is still working.They will inform us when it is ready

Any update is there.

I think erpnext can handle all the above concerns

@sadishskv I think erpnext can handle all the above concerns

@Fred1 This is the Nigerian Income tax structure…how did you handle it in erpnext?

@olamide_shodunke simple paye formula will automatically calculate paye.We will glad to help if thete is challenges in formulating it

Just an idea of how you do it would be appreciated.We currently use several slabs using the < > signs to move from one slab to the other and apply the relevant %. Its near accurate.

Just wondering how you do yours to see if their is a better approach

Regards

@olamide_shodunke How to Map Requirement in Formula in Salary Structure