To add a recurring deduction for a specific payroll group, click on Payroll Settings from the sidebar and open the Payroll Groups section.
Select the payroll group you want to update and go to the Salary Components tab.
Stay on the Recurring Components section, where all monthly fixed components are listed.
Click the Add New Component button on the top-right to create a new recurring deduction.
Enter the component name and choose Deduction as the component type.
Select the pay logic, such as Flat Amount or Percentage of CTC, and enter the required percentage or amount.
If applicable, define the maximum annual limit.
Explanation of each checkbox with examples:
- Apply tax exemption to this component
- Use this when the deduction amount should reduce the taxable income.
- Example: If ₹500 is deducted every month as “Charity Deduction”, enabling this ensures that taxable salary is reduced by ₹500.
- Make it eligible for arrears calculations
- Use this when the deduction must be adjusted for previous unpaid cycles.
- Example: A new ₹200 deduction was supposed to start in January but added in March. The system will auto-deduct missing amounts for Jan and Feb.
- Permit employee-level custom values and overrides
- Use this when different employees may have different deduction amounts.
- Example: One employee may get a ₹150 deduction for late fees, another may get ₹300 depending on policy. You can also manually adjust the amount during payroll execution.
- This component is not affected by any Loss of Pay days
- Enable this when deduction should stay fixed even if the employee has LOP.
- Example: A fixed ₹100 compliance penalty should always be deducted, even if the employee takes unpaid leave.
- Calculate it on a pro-rata basis
- Enable this when deduction should reduce if the employee works fewer days.
- Example: A monthly deduction of ₹600 becomes ₹300 if the employee worked half the month.
- Display in the payslip
- Shows this deduction clearly in the employee’s payslip.
- Example: Payslip will display “Uniform Deduction – ₹250.”
- Mark as active
- Ensures the deduction is applied in payroll.