Salary Structure
You agree a gross salary with a man. The salary structure is the recipe that splits it into basic, house rent, medical and the rest, so that every man on the same structure is split the same way. It also decides which accounts his pay posts to.
What it is for
Nobody is paid a gross salary. A payslip is a set of lines, and the lines have to add up to what was agreed. This screen holds the split, and it holds it once rather than on five hundred individual records.
A man's structure is named on his Employee Organization Assignment. When his Recurring Payments and Deductions record is built, the structure is read and his pay lines are produced from it. That is the only moment the structure is used: it builds his salary lines, and from then on the payroll run reads the lines, not the structure. So changing a structure does not change anybody already on it until their salary record is rebuilt.
Each line is either a share of gross or a fixed amount. Give a line a Value % greater than zero and the line is that percentage of the gross salary on the man's record. Leave the percentage at zero and the Value amount is used as it stands. The percentage wins whenever it is filled.
That has one consequence worth saying at the meeting: the percentages on the earning lines have to come to a hundred. Split a gross of 60,000 as 50 percent basic, 30 percent house rent and 20 percent medical and the lines total 60,000. Use 50, 30 and 10 and the man is paid 54,000 while his record says his gross is 60,000, and nothing on screen will warn you.
The second tab is the accounting. By default a wage type posts to the accounts on the Wage Type itself. Fill a line here and this structure posts that wage type somewhere else, which is how factory wages reach a different expense account from office salaries.
Every field, in plain words
Basic Data
| Field | What it means | What to put in it | Notes |
|---|---|---|---|
| Salary Structure | The code you will pick on an organization assignment | STAFF, WORKER, MGMT | Required |
| Name | How the structure reads in a list | Factory Worker Structure | Required |
| Block | Stops the structure being used | Leave it clear | A blocked structure cannot build a salary record at all. See the note below |
Wage Breakup
One line per wage type the structure pays or deducts.
| Field | What it means | What to put in it | Notes |
|---|---|---|---|
| Line # | The line number | Fills itself | Leave it |
| Wage Type | The wage type this line produces | 1000 Basic Salary | Required. Pick from the list |
| Name | The wage type name | Fills itself from the wage type. Leave it | |
| Wage Type Direction | Whether the line pays or deducts | Fills itself from the wage type, D Debit for an earning | The values are explained on Value lists |
| Value % | The share of the man's gross salary this line is | 50 on basic, 30 on house rent, 20 on medical | Used whenever it is greater than zero, and then Value is ignored. The earning percentages should total 100 |
| Value | A fixed amount for this line, used only when Value % is zero | 2500 for a canteen subsidy everybody gets the same | Leave it at zero on a percentage line |
Wage Mapping Accounting
One line per wage type whose accounts should differ from the accounts on the wage type itself. Lines you do not add simply use the wage type accounts.
| Field | What it means | What to put in it | Notes |
|---|---|---|---|
| Line # | The line number | Fills itself | Leave it |
| Wage Type | The wage type being redirected | 1000 Basic Salary | Pick from the list |
| Name | The wage type name | Fills itself. Leave it | |
| Debit Account | The account to debit for this wage type on this structure | The factory wages expense account | Pick from the chart of accounts |
| Credit Account | The account to credit | The salaries payable account | Pick from the chart of accounts |
| Line Text | A note that travels with the posting | Factory direct labour | Optional |
Accounts you put here are checked when an employee is given this structure. If an account needs a cost centre or another dimension that the man's organization assignment does not carry, the assignment is refused with a message naming the salary structure. That check is deliberate: it stops a payroll being produced that cannot be posted.
How to configure it
- Create the Wage Type records first, and have the chart of accounts in front of you for the second tab.
- Decide with the finance manager how many structures the client really needs. One per group that is split differently, which at a manufacturer is usually three: management, staff and workers.
- Create the structure, code
WORKER, name Factory Worker Structure. - On the Wage Breakup tab add the basic line first. Wage type
1000, Value % 50. - Add the percentage allowances: house rent
1100at 30, medical1200at 20. - Add any flat line as an amount instead. Canteen subsidy
1400, Value % 0, Value 2500. - Add the recurring deduction lines the client takes from everybody on this structure.
- Check the earning percentages total 100. Nothing on the screen will do it for you.
- On the Wage Mapping Accounting tab, add a line for each wage type that should post somewhere other than its own default, and fill the debit and credit accounts.
- Save, then name the structure on each man's Employee Organization Assignment.
Scenarios
"A worker on 40,000 and a manager on 300,000 are split differently"
Two structures. The worker structure is 50 basic, 30 house rent, 20 medical. The management structure might be 40 basic, 35 house rent, 15 medical, 10 car allowance. The gross is still typed per man, so the same structure serves every worker whatever he earns.
"Everybody gets the same 2,500 rupee canteen subsidy regardless of salary"
A line with Value % 0 and Value 2500. A fixed line is not scaled by the gross, so it stays at 2,500 whether the man earns 30,000 or 300,000.
"Factory wages must hit a different expense account from office salaries"
Keep the wage types the same and use the Wage Mapping Accounting tab on each structure. The factory structure points basic salary at the factory wages account, the office structure leaves it to the wage type default.
"We changed the structure but nobody's pay moved"
That is how it works. A structure builds a salary record once. To apply the new split, rebuild the Recurring Payments and Deductions record for the staff affected, which replaces their lines from the structure as it now stands.
"What happens to a line whose wage type we blocked"
The line is still copied onto the man's salary record, because blocking a wage type does not remove it from a structure. From then on the amount is inside his gross and net totals but his payslip no longer shows the line, so his payslip will not add up to his net pay. Remove the line from the structure and rebuild the salary records instead of relying on the block.
What it is connected to
- Needs Wage Type first, and the chart of accounts for the second tab.
- Named on Employee Organization Assignment. That is the only place a man is attached to a structure.
- Read by Recurring Payments and Deductions when it builds a man's pay lines, and by nothing else. The payroll run reads his lines, not the structure.
- The accounts here are validated against the dimensions on the organization assignment when the assignment is saved.
If something looks wrong
- "It says the salary structure is not defined for this employee" - his organization assignment has no structure on it, or the assignment is closed. Open Employee Organization Assignment and set it.
- "It says the salary structure detail was not found" - either the structure has no wage breakup lines, or the structure is blocked. A blocked structure reads as an empty one.
- "The pay lines do not add up to the gross we agreed" - the earning percentages do not total 100.
- "Saving an organization assignment is refused with a message about the salary structure" - an account on the Wage Mapping Accounting tab needs a dimension the assignment does not carry. Either complete the dimensions on the assignment or correct the account.
- "A payslip no longer balances to net pay" - a wage type on the structure has been blocked. Its amount is still in the totals and its line is gone.