Wage Type Category

Every wage type has to say what kind of pay it is: basic salary, house rent, an overtime allowance, a loan recovery. That answer is a wage type category, and you build the list of them here before you build a single wage type.

Where

Payroll › Setup › Wage Type Category

Who uses it

The implementation consultant, once at the start of the payroll setup

When

Before any Wage Type is created

Needs first

Nothing

What it is for

A category is the label that tells both the system and the reader what a wage type really is. You will create perhaps fifteen of them at a client and then never touch the screen again.

Two different things depend on it. The first is reporting: a payroll register grouped by category is the report a finance manager actually reads, because it puts all the allowances together and all the deductions together. The second is one specific piece of arithmetic. The payroll run has to know which of a man's wage types is his basic salary, because allowances are usually a percentage of basic, and it finds that line by looking for the category whose constant is Salary Basic. Nothing else in the system is picked out by its constant.

A wage type with no category is not a small problem. The payroll run joins every wage type to its category, so a wage type whose category has been left blank does not appear in the run at all, and the man is simply paid less with no error on screen.

Every field, in plain words

Basic Data

Field	What it means	What to put in it	Notes
Wage Type Category	The short code you will pick on each wage type	BASIC, HRA, DEDUCT, TAX	Required. Keep it short and recognisable, it shows on reports
Category Constant	Which of the fixed kinds of pay this category is. The list is supplied with the system and cannot be added to	SBA Salary Basic for the basic salary category	Required. Pick from the list. See the table below
Name	The category as it should read on a report	Basic Salary, House Rent Allowance	Required
Block	Stops the category being picked on a new wage type	Leave it clear	Tick it only to retire a category you no longer use

The category constants you can pick

Exactly one of these matters to the arithmetic. SBA Salary Basic is how the payroll run finds a man's basic salary. Every other constant is a classification for you and for the auditor, and no calculation branches on it, so pick the one that describes the pay honestly and move on.

Constant	What it is	Constant	What it is
SBA	Salary Basic	HRA	House Rent Allowance
MED	Medical Allowance	TRA	Transport Allowance
CFA	Car Fixed Allowance	CAA	Car Sale
OTA	Overtime Allowance	NAL	Night Allowance
LAW	Late Working Allowance	SAW	Site Allowance
WAS	Washing Allowance	FAW	Food Allowance
CAN	Canteen Subsidy	MAW	Mobile Allowance
TEN	Telephone Bill	EDU	Education Allowance
DEA	Dearness Allowance	DEP	Deputation Allowance
PER	Personal Allowance	OAL	Other Allowance
CAD	CAD / CAM Allowance	LIT	Literature Allowance
MAI	Maintenance Allowance	TAW	Transfer Allowance
SUP	Superannuation Allowance	LTA	Leave Travel Assistance
INC	Incentive	AWD	Award or Reward
BON	Bonus	EXG	Ex gratia
SPP	Special Payment	ADP	Additional Payment
SPD	Special Deduction	ADE	Additional Deduction
ARA	Arrears	INT	Income Tax
PFA	Provident Fund	GRA	Gratuity
MDC	Mediclaim	MMA	Maternity Medical
MMW	Mother Medical Allowance	LES	Leave Encashment at Separation
LSE	Leave Encashment During Service	LSA	Leave Salary Advance
NPP	Notice Pay Payable	NPR	Notice Pay Recovery
LOP	Loan Payable	LRP	Loan Recovery Principal Amount
LON	Loan Recovery Interest	OLD	Other Loan Deduction
EML	Emergency Loan	PFL	Provident Fund Loan
SAD	Salary Advance Payment	ADD	Advance Deduction
VFW	VLF Lease Wage	VLW	VLF Loan Wage

How to configure it

1. Open the screen and create the basic salary category first. Code BASIC, name Basic Salary, constant SBA Salary Basic. Do this one before anything else, because without it the payroll run has no basic salary to work from.
2. Add one category per kind of allowance the client actually pays. At a manufacturing company that is usually house rent, medical, transport, canteen and a washing allowance for the factory.
3. Add the deduction categories: income tax, provident fund, loan recovery, and one for the ad hoc deductions.
4. Save. Repeat until every line that will ever appear on a payslip has a category to belong to, then go on to Wage Type Group and Wage Type.

Scenarios

"Our basic salary is 60 percent of gross and everything else is worked out from it"

That only works if the system can find the basic salary line. Create one category whose constant is SBA Salary Basic, point the basic wage type at it, and never give that constant to a second category. Then set each allowance on the Pay Rate as a percentage, and the run has a figure to apply it to.

"We pay the factory a washing allowance that the office does not get"

That is not a category question. Create one category, Washing Allowance with constant WAS, and one wage type under it. Who receives it is decided on the Salary Structure you give the factory staff, not here.

What it is connected to

• Must exist before Wage Type, because every wage type has to name a category.
• The payroll run reads the category of every wage type on a man's pay, and uses the Salary Basic constant to identify his basic salary.
• Changing a category's constant after payroll has run changes how the next run reads those wage types. Treat the constant as fixed once you are live.

If something looks wrong

• "An allowance is missing from everybody's payslip and there is no error" - the wage type behind it has no category, so the run does not see it. Open Wage Type and set one.
• "Every percentage based allowance comes out as zero" - no category carries the Salary Basic constant, so the run finds no basic salary to take a percentage of.
• "Two categories both say Salary Basic" - that is not a configuration the run can read reliably. Keep the constant on one category only.