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ERPNext for Finance

Payroll Setup

In order to generate Payroll Entry, you must:

  1. Each Employee must be linked to a Department. And the Department must have “Payroll Cost Center” set. Default payroll cost center would be “Main – L”.
  2. Company must be linked to a default Holiday List. If needed, some employees can be linked to a different Holiday List.
  3. Have Salary Components. For each component, e.g. “Basic”, make sure to set the Account.
  4. Have a Salary Structure. Salary Structure is not per employee, but per “generic structure”, i.e. Basic + Incentives, etc. Each component can have formula. Setup at least “Basic” component with formula “base“. This “Base” amount will be retrieved from Salary Structure Assignment.
  5. Make Salary Structure Assignment per employee and time frame. So if there’s a pay change, create another Salary Structure Assignment that either changes the Salary Structure, or the base/variable amount.

Payroll Entry (Monthly)

In order to generate a payroll entry for all employees (or by department) within a month, you do:

  1. Payroll List > New Payroll Entry
  2. Posting Date: Day 21 of payroll month. Payroll Frequency: Monthly. Payroll Period Start Date: 21 of last month, End Date: 20 of current month.
  3. Click “Save“.
  4. Click “Get Employees
  5. If that works, you can Save the Payroll Entry.
  6. Then you can create Salary Slips for these employees, by clicking “Create Salary Slips“.
  7. Set Payment Account: “113.000 – Kas Hendy – L”. Then click “Submit Salary Slip” to submit Salary Slips and create a single Journal Entry so it becomes part of general ledger.

Troubleshooting: “Get Employees” returned 0 employees or not as expected.

Solution: Make sure that all employees:

  1. Company must be linked to a default Holiday List. If needed, some employees can be linked to a different Holiday List.
  2. Department is set.
  3. Their Department has “Payroll Cost Center” set.
  4. The Salary Structure has at least “Basic” component with “base” formula.
  5. Linked to Salary Structure Assignment, with exact base amount filled (greater than zero) and correct start date.

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