How to Create Overtime Earning Pay Heads in Tally Prime?

Step: GOT > Create > Pay Heads > Enter

Ø After reaching by follow above step, fill all details to create Overtime Pay Heads like,

· Name–Enter the name of Earning Pay Heads. like I Enter “Overtime”

· 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 overtime is fixed in every month then use this income type. Like overtime of employee is fixed for a particular period.

§ Variable – If your employee’s Overtime is vary or changes in every month then use this income type

v I select “variable” from both of them income type because overtime is variable.

· Under – Select Indirect Expense because conveyance is indirect expense for Employer.

· Affect Net Salary – Set to this option “Yes” because overtime Affect net Salary.

· Name to be displayed in payslip – Type name “OT Pay” to Print in Pay Slip.

· Use for Calculation of Gratuity – Set to this option “No” because Gratuity calculated

only 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 Overtime.

Ø After income tax details set to “Yes” a new window appear in front of you.

Ø In this window select the appropriate option like,

§ Income tax Component – Select the required tax component for your Pay heads like I select Other Earning/Allowance fully taxable” for Overtime form list.

§ Tax Calculation Basis – in this section two option are available first

1. On Projected Value – If overtime of employee will not change according to months or Year then select this option.

2. On Actual Value – If overtime of Employee will change according to months or year then select this option.

Ø I select “On Actual Value”

§ Deduct TDS across periods – Set to this option “Yes” because Overtime is taxable.

Ø
Fill details in Income tax details like following screenshot:

· Calculation Type – Select “On Production” from list for Overtime because it is decided on work or Production of Employee.

· Production type –select “Overtime”. Because overtime, Paid according to overtime attendance type.

· Rounding Method – Select any rounding method to round off Decimal portion of

Overtime 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 Overtime Earning Pay heads like following screenshot:

Ø Press Enter or Ctrl+A to save this screen.

Bonus Earning Pay Heads