How to create Salary Structure for Employee in ERPNext ?

Salary Structure represents employees earning and deduction and based on that employee salary will be calculated.

Follow these steps to create salary structure in ERPNext

1)Goto

Human Resources->Setup->Salary Structure

As you can see in the above diagram,In salary Structure select the employee to whom you are going to create salary structure,select Yes if employee is active in Is Active.Also add Earning and Deduction in salary structure.

2)In the Earning select earning type like Basic,Home Rent Allowance and in deduction select deduction type like Income Tax,Provident Fund

As you can see in the above figure,Here you can see how we added earning and deduction types in salary structure

3)You can also create new Earning Type by clicking Create New Earning Type in Earning Row

or you can create earning type by going

Human Resource->Setup->Earning Type->New

As you can see in the above diagram,Enter the Name and Description for Earning Type and Save it.

Deduction type is same as earning type

4)After entering all data Save and Submit the form

5)Salary Structure will be created for employee and from salary structure you can create salary slip for employee by clicking Make Salary Slip

Note:

1)If your employee takes more leaves than allocated or employee runs out of leaves or employee takes leaves without approval(via Leave Application) then these comes under Leave Without Pay(LWP). If your organisation supports LWP then Check Leave Without Pay in Earning and Deduction type.ERPNext will automatically deduct salary in case of LWP. Salary Amount will be calculated based on LWP and total number of working Days.

As you can see in the above diagram,If your organisation support LWP then Check Reduce Earning/Deduction for Leave Without Pay(LWP) in Earning/Deduction master.In the figure we showed LWP for earnings and it is same in deduction also.