Creating Salary Advance Deduction Pay Head

To create the Salary Advance Deduction pay head to deduct the loans given to employees

1. Go to Gateway of Tally > Payroll Info. > Pay Heads > Create.

2. Enter pay head name in the Name field.

3. Select Loans and Advances as the Pay Head Type from the list of Pay Head Type.

4. Select Loans and Advances (Assets) from the List of Groups, in the Under field.

5. By default, Affect Net Salary is set to Yes. Type No, if you want to exclude this component from the pay slip.

6. By default, the Pay Head component name entered in the Name field appears in the Pay Slip. If you want to change this, enter the appropriate name in the Name to appear in Payslip field.

7. Set As User Defined Value as the Calculation Type, from the List of Calculation.

8. Press Enter to accept.

Note: You may need to recover from the employee's salary, the interest towards the loan/advance given. In such cases, you can use the interest calculation feature to calculate the EMI for each month, and set the Calculation Type as Flat Rate to recover the amount.