To add a recurring reimbursement 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 reimbursement.
Enter the component name and choose reimbursement 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 reimbursement is tax-friendly.
- Example: If an employee receives ₹1,000 per month as “Internet Reimbursement,” the amount may be exempt from tax if bills are submitted.
- Make it eligible for arrears calculations
- Enable this if reimbursement should adjust when applied for previous months.
- Example: If an employee becomes eligible for “Fuel Reimbursement” from January but you add it in March, the system will give the amount for January and February automatically.
- Permit employee-level custom values and overrides
- Use this when different employees can have different reimbursement limits.
- Example: A field employee may receive ₹2,000 reimbursement, while a regular employee receives ₹1,000, you can also manually adjust the amount during payroll execution.
- This component is not affected by any Loss of Pay days
- The employee will get the full reimbursement even if they had unpaid leave.
- Example: “Mobile Reimbursement” of ₹500 is paid entirely, even if the employee took 3 unpaid leave days.
- Calculate it on a pro-rata basis
- The reimbursement will reduce based on attendance.
- Example: If “Internet Reimbursement” is ₹1,200 monthly and the employee works only half the month, they will receive ₹600.
- Include in EPF Contribution
- Enable this only if the reimbursement should be part of PF calculations.
- Example: Normally reimbursements are not counted in PF, so this is typically OFF.
- Include in ESI Contribution
- Enable this if the reimbursement amount should be considered for ESI salary.
- Example: If employee salary is ₹20,500 and they receive a ₹500 reimbursement, ESI will calculate on ₹21,000 if this is checked.
- Display in the payslip
- Shows the reimbursement as a separate line item on the employee’s payslip.
- Example: Payslip will show “Fuel Reimbursement – ₹1,000.”
- Mark as active
- Ensures the reimbursement component is applied during payroll processing.
- Once configured, click Save to add the reimbursement to the payroll group.