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How to use ERachana's Payroll Application?

Erachana Line

Installation

ERachana’s Payroll Application can be installed in the same way as any other standard windows application. Download, Install and Register thePayroll Application from our website www.erachana.net. Installation & Registration are explained in Detail in other videos.

After registration, create a New File and enter Masters’ Details.

Create Masters

Masters are used for storing various master details. The Masters can be accessed from the Masters menu. To use this application for Payroll Processing, first, Masters’ like My Company and Item Master should be updated.


Enter Places in Place Master

To Enter Places, first you should add Country inCountry Master, and then Add State in State Master.



To add Country, Select Country in Masters , and in the window that opens, enter the Country Name and click Save.



To add State, Select State in Masters, and in the window that opens, select Country, enter the State Name and click Save.

Note: All Indian States are already added, and you are not allowed to modify them.



To add a Place to Place Master, in Masters, select Place Master. In the window that opens, select the State and enter the Place Name, and click Save to save the Place.




Enter Company Information in Company

Enter details of your Company in Company.

To do this, click Company menu and then click Company Details.



In the window that opens, enter details of your company likeCompany Name, Address,Place, PIN Code,Phone No, Email Id andWebsite. Enter Other details likeEstablishment Date, PAN Number andDate, TAN Number and Date.



You can add company logo by clicking Browse and selecting the Logo Image. Click Save to save the Company Settings.




Enter Month Settings

In Masters, you should first create Months of the year to apply them for Payroll processing.

To add Month, in Masters menu, click Month.

In the window that opens, enter Year and select the Month. Click Save to create the respective month.




Enter Employee Details of Employees in the Company

To enter employee details, in Employee menu, click Employee Details.



In the window that opens, Enter Employee Name. InDetails Tab, enter Join Date, selectGender, Mobile Numbers,Email Ids, DOB, and select Blood Group.



In Other Details, enter PAN, ESI, PF and NPS numbers and if the employee has a passport, enter the Passport Number and Date.



In Address Tab, enter the Local and Permanent Addresses of the employee. Select Place. Enter Personal details likeMarital Status, Spouse’sName, Parents Name and Children’s Names.



In Bank Details Tab, enter A/c Number,Bank Name, Branch, IFSC Code, and MICR Code . Here, you can enter any details about the employee in About Employee box. Click Save to save the Employee details.



Configure Company Payroll Settings

In Company menu, click Company Details.



In the Window that opens, click Settings button to configure basic Payroll Settings for the Company.



In Company Settings window, some basic payroll components are already added. For these components, you can select the month from when they are applicable in Payroll.

Select the Component Row in the grid, and for that component, check the checkbox Is Applicable? and select theMonth from when it is applicable in Applicable From dropdown. Click Save to save the Component Settings.



Note : If you have not created the month, it will not appear in the dropdown.


Enter Salary Component Settings

In Salary Component Settings, you can add new Salary Components or configure the settings of basic components.

In Masters menu, click Salary Component Settings.



In the Window that opens, enter the Component Name. If it is an Earnings (additive component in Salary), check the Is Earnings? Check box. Otherwise the component will be considered as a deductible component of salary.



Select the From Month, from which the component will be included in Payroll and added to Employee Salary. In Print Name, you can enter a suitable name for the component or abbreviation that will be reflected on the Payslip print. For example, the Print Name for Dearness Allowance can be DA.



In Calculation Type, select Fixed Rate for fixed amount Components (like Basic). If the component is based on Salary Days, select the option Apply Salary Days on Rate. If the Component Amount varies every month, select Monthly Value Entry.



If the Component should be considered for PF calculation, check the checkbox Is PF Applicable?

Similarly, If the Component should be considered for ESI calculation, check the checkbox Is ESI Applicable?



Note: To modify the configuration of already added basic components, select the component in the grid and modify.



Click Save to save the Salary Component Settings.


Configure Bonus

Bonus is a compensation amount given to an employee in addition to his/her normal salary, as a reward for achieving specific goals set by the company, like incentive bonus, performance bonus etc. It is paid annually.

To configure Bonus amount, in Masters, click Bonus Configuration.

Select Year and enter Bonus Percentage.

Click Save to save the Bonus Configuration.




Select Year and enter Bonus Percentage.



Click Save to save the Bonus Configuration.

Configure ESI

ESI (Employee’s State Insurance) is calculated only for the employees whose Salary is below 21,000. It is a health insurance scheme for Indian workers to provide medical and cash benefits to them. It is managed by Employees State Insurance Corporation (ESIC). Since the Employee will have insurance for half yearly period, the ESI amount has to be deducted for the whole half year period, even if employee salary has been revised and he will not come under ESI purview any more.

To configure ESI, select ESI Configuration in Masters.



In the window that opens, select the month from which ESI is applicable for Employees as From Month.



Enter the Employee’s Contribution percentage amount in Employee %.
Enter the Employer’s Contribution percentage amount in Employer %.
In ESI Wage Limit, enter the wage limit until which ESI is applicable.



Enter Remarks if any and click Save to save the ESI Configuration.


Configure NPS (National Pension Scheme)

A pension is a fund into which a sum of money is added during an employee's employment years, and from which payments are drawn to support the person's retirement from work in the form of periodic payments.

To Configure NPS, in Masters, select NPS Configuration.



In the window that opens, select From Month and enterEmployee % and Employer %. Enter Remarks if any and click Save to save the NPS Configuration.



Note: It is not mandatory for Employer to contribute in NPS. Employee can contribute up to 10% of Basic plus DA.


Configure PF (Provident Fund)

Provident fund is a fund which is composed of contributions made by the employee during the time he/she worked along with an equal contribution by his employer

Only if the Company consists of employees more than 20 then the company can be registered under PF. If the company is registered, each employee must contribute to his PF Account.

To configure PF, in Masters, select PF Configuration.



In the window that opens, just like in ESI Configuration,From Month, Employer % and Employee % can be entered for PF Configuration.

Note: Under the present law, it is mandatory for units employing 20 or more persons and earning up to Rs 15,000 a month to provide EPF benefits to workers. While employees contribute 12% of the basic pay to EPF, the employer contributes 8.33% towards the employee’s pension scheme and 3.67% to the EPF itself. Employees also make matching 12% contribution. Additionally, employers also pay 0.5% towards EDLI, 0.65% as EPF administrative charges and 0.01% as EDLI handling fee.

Employee Pension (EPS) % will be 8.33 % which is taken from Employer’s contribution.

Admin Charge is the processing cost in %, which will be applied while submitting the PF amount of the employees

(Employees Deposit Linked Insurance Scheme) EDLI % gives insurance coverage subject to a maximum amount of six lakh (600000) in the event of natural death, Illness & accident. The funding of EDLI or contribution towards EDLI is done by employer on behalf of his employee apart from PF contribution.

EDLI Admin Charge % is processing cost.



Enter Remarks if any and click Save to save the PF Configuration.


Configure PT (Professional Tax)

Professional Tax is collected by the State Governments from individuals who work in government, private and non-government organizations (NGOs). The highest amount of professional tax charged in India is 2,500/-.

Professional Tax is deducted by the employers from the salary of the salaried employees and same is deposited with the State Government. PT rules are different for different Indian States. The PT is payable Annually, Semi Annually or Monthly, and based on Monthly Salary bracket, and Gender.

Based on the above criteria, the PT amount will directly reflect on Monthly Salary.


Configure TDS (Tax Deduction at Source)

TDS on salary is mandatory for all employees earning taxable income. TDS on salary must be deducted based on the estimated income-tax computed on the basis of the income tax rates in force. Therefore, estimated annual income of the employee is first computed. Then other income or losses are deducted along with allowed deductions declared by the employee, and income tax is computed on the estimated annual taxable income. The estimated annual income tax is then divided by the number of months applicable and TDS is deducted every month from salary payment. The TDS on salary is then remitted by the employer with the Government Treasury.

To Configure TDS, in Masters, select TDS Configuration.



In the window that opens, select Employee and select From Month, and enter Deduction Amount. The mentioned amount is then deducted from the chosen month, for every month, until the next TDS Configuration revision.



To revise the TDS Configuration, select the Employee and select the From Month and enter TDS Deduction Amount. From the selected month, the new TDS configuration will be applicable.

For example, for the initial months in the year, a suitable amount can be deducted, and in the last few months of the financial year, if the employee declares investments or exemption details, the new TDS amount can be set for that employee for the remaining months.


Configure Employee Salary


Employee Salary Configuration and Monthly salary of Employees can be set in Salary Menu.

Configure Employee Salary



To Configure Employee Salary, in Salary Menu, click Salary Configuration.



In the window that opens, select Employee and From Month. Until a new month is selected from which salary will be revised, for the selected employee, the Salary will be generated based on this configuration.



To add components, click Add, select the Component and enter Value, if required. Click Update.



You can see all the salary components in the grid, and Based on selected components, Total Earnings and Total Deductions and Net Amount at the bottom of the screen.



Click Save to save the Employee Salary Configuration.


Configure Additional Components

Additional components like Advance Loan, Gratuity or Leave encashment can be configured in Additional Component Menu.

Configure Advance

Advance is a loan taken by an employee from the Company. Once the loan is sanctioned and paid to the employee, the Repayment Settings can be configured.

To Configure Advance, in Additional Components, click Advance.



In the window that opens, select the Employee andDate when advance is taken. Enter Advance Amount.



To Auto Generate the recovery plan, click Auto Button.



In the window that opens, enter the Number of Instalments and Recovery Start Month. Click Generate Instalments.



A Recovery Plan will be seen in the grid. Click Save to save the plan and close the window. This Recovery Plan will be added to the grid, in Advance Window.

The Recovery Plan can also be manually entered as and when Payments towards Advance are made.

When the employee makes payment, Click Add, Select the respective Month, and enter the Deduction Amount.



The corresponding Loan Amount,Difference Amount,Planned Recovery Amount andRecovered Amount can be seen. Click Update to update the payment. Click Save to Save the repayment.




Configure Gratuity

Gratuity is a monetary benefit given by the employer to his employee at the time of retirement. An employee’s eligibility to receive gratuity starts only if he has worked in an organisation for at least five years.

To Configure Gratuity, in Additional Components, select Gratuity Configuration. In the window that opens, enter the following details –

In Served for Years, the number of years the employee has worked in the Company is shown.

In Salary, the latest salary amount drawn is shown.

In Edited Years and Edited Salary enter the final figures for Years and Salary based on which the company decides to pay Gratuity.

Based on the above details, Gratuity Amount gets calculated.

In Edited Amount, enter the final Amount paid as Gratuity.

In Date of Payment enter the Date when Gratuity is Paid.

Click Save to save the Gratuity Configuration.

Configure Leave Encashment

Leave encashment refers to an amount of money received in exchange for a period of leave not availed by an employee.

Encashment of accumulated leave can be availed by an employee at the time of retirement, during the continuation of service or at the time of leaving the job. The leave encashment policy varies from employer to employer. Some employers pay for the un-availed leaves in the next calendar year. Some let the employees carry forward the balance leaves in a year to the next year. And the employer pays for the un-availed leaves at the time of leaving the job. Income tax treatment of the amount received towards leave encashment depends on type of employment - private or government - and time of - in service or at the time of retirement.

To Configure Leave Encashment, in Additional Components menu, select Leave Encashment. In the window that opens, select Employee, select a Month, enterEncash Days, Salary Considered and Encashed Date. Based on the details, Encash Amount will be calculated and shown. Enter the final Leave Encashment Amount in Edited Amount. Click Save to save the details.


Generate Monthly Salary

To generate monthly Salary for all employees, in Salary menu, click Monthly Salary.

In the window that opens, select the Month and click List. The Monthly Salary of all employees can be seen in the grid.

For each employee, to configure final monthly salary, you can enter Salary Days and Present Days, and the respective monthly salary for that amount will be seen under respective column headings.

Salary Days are the Working Days in the selected Month. Present days is the number of days for which the selected employee will be paid salary.

To generate the salary, click Generate Payslip button.