How to Create Basic Salary Earning Pay Heads in Tally Prime?
Step: GOT > Create > Pay Heads > Enter
After reaching by follow above step, screen of Pay Heads will shown like that following screenshot:
Ø Fill all details like,
· Name–Enter the name of Earning Pay Heads. like I Enter “Basic Salary”
· Pay head type – In this section different type of Pay heads are listed. Select “Earnings
for Employees” from list to create Earning Pay heads.
· Income type – These are two type of Income gain by employee first fixed and second Variable.
§ Fixed – If your employee’s income is fixed in every month then use this income
type. Like Basic Salary of employee is fixed for a particular period.
§ Variable – – If your employee’s income is vary or changes in every month then use this income type. Like Overtime Salary of employee is variable in every hours and Days.
v I select “Fixed” from both of them income type.
· Under – Select Indirect Expense because Salary is indirect expense for Employer.
· Affect Net Salary – Set to this option “Yes” for Earning and Deduction Pay Heads
because Net Salary Affected by earning and Deduction Pay heads.
· Name to be displayed in payslip – This word are shown in payslip of employee. Left by default name, if want to change this then you can change accordingly you and your employee understanding of this word. Like I leave as by default name “Basic Salary”.
· Use for Calculation of Gratuity – Set to this option “Yes” for Basic Salary and Dearness Allowance Pay heads only, because Gratuity calculated on the basis of Basic Salary + dearness allowance.
· Set/Alter Income tax details – Set to this option “Yes” for income tax deduction from
employee’s Basic Salary in case of Taxable income.
Ø After income tax details set to “Yes” a new window appear in front of you like that
Ø In this window select the appropriate option like,
§ Income tax Component – Select the required tax component for your Pay
heads like I select “Basic Salary” for Basic Salary form list.
§ Tax Calculation Basis – in this section two option are available first
1. On Projected Value – If Salary/Income or Earning of employee will not change according to months or Year then select this option.
2. On Actual Value – If Earning or Income of Employee will change according to months or year then select this option.
Ø I select “On Projected value”
§ Deduct TDS across periods – If you’re earning pay Heads is fully taxable then set to this option “Yes”. I set to this “Yes”.
· Calculation Type – Select required method for Calculation of your Earning Pay heads.
Like I select “On Attendance” from list for Basic Salary.
· Attendance/Leave with Pay – Select “Present” for calculation of Salary because Basic salary calculate on Positive attendance of Employee.
· Calculation Period – Select required calculation period for calculate Your Earning Pay
Heads like I select on “Months”. Because Basic Salary calculate according to Month wise.
· Basis of Calculation (per day) – Select “As per Calendar Period” for counting days in a
month. Automatically pick days according to days in any particular months.
· Rounding Method – Select any rounding method to round off Decimal portion Salary
amount. Like I select “Normal Rounding”.
· Limit – Type Limit amount of rounding to round off according to limit. Like I type “1”.
Ø Fill all Above details in Pay heads screen to create Basic Salary Earning Pay heads like following screenshot:
Ø Press Enter or Ctrl+A to save this screen.