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Payroll in TallyPrime

Payroll in TallyPrime helps you manage employee salaries, track attendance, process payments, and handle statutory compliance, all within your regular accounting workflow. Once you have enable Payroll, you can seamlessly move from employee setup to salary processing and reporting without requiring separate systems.

If your business follows statutory compliance, you can enable Payroll Statutory features to manage contributions, deductions, and regulatory requirements such as PF, ESI, NPS, Professional Tax, and Income Tax.

Generate Employee Profile

TallyPrime allows you to keep records of employee profiles by creating the required employee masters and filling in the necessary details. Depending on your business needs, you can organise your employee masters department-wise by creating employee groups and categories, as needed.

TallyPrime provides you with additional reports to view the overall employee headcount, passport, visa, and contract expiry details, depending on the details you enter in the employee masters.

If your business follows any statutory compliance, you can create employee records with statutory details such as the tax regime and information related to PF, ESI, and EPS.

Define Salary Structure for Employees

After creating employee records, you can proceed to define their salary structure. You can create the employee salary structure while creating the employee master or separately. To define the salary structure, you need to create appropriate pay heads. If there is any change during the financial year, you can alter the salary details accordingly.

Include Earning Pay Heads

• Basic Pay, HRA, and DA are standard earning pay heads commonly included in a salary structure.
• If your business pays for overtime, you can create an Overtime Pay Head and include it in the salary structure of the relevant employees.
• For employee reimbursements, such as conveyance, you can create separate Conveyance Pay Heads.

All these earning pay heads can be configured with the required statutory details. In order to calculate income tax of an employee, you will also need the Income/Exemption and Tax Paid details of previous employer.

Include Deduction Pay Heads

If there are any expenses, such as statutory deductions, that need to be recovered from employees, you can create the necessary deduction pay heads and include them in their salary structure.

To recover statutory deductions from employee salaries, create the relevant pay heads such as PF, ESI, NPS, Professional Tax, and Income Tax, as applicable.

Create Attendance Voucher for Salaried Employees

Before recording attendance for employees, create Payroll Units to measure attendance in days and define Attendance Types to capture present and absent days. Then record the attendance for salaried employees using an Attendance Voucher.

Once recorded, you can view details such as days present or absent, and any overtime in the Attendance Sheet report. Additionally, the Attendance Register shows the number of attendance vouchers recorded for each month.

Process Payroll Transactions

Are you following the accrual method of accounting? Then you need to create a Payroll Voucher to record salary accrual. You will also need to create a Salary Payable ledger to account for the accrued amount.

Once the salary is accrued, you can proceed with the salary payment. If there are any changes in the salary structure after accrual, such as pending dues, you can process them as arrears in a similar manner. If you are following the cash method of accounting, you can directly record the salary payment without creating an accrual entry.

After recording all salary components, you can analyse payroll using reports such as employee-wise pay head breakup, pay head-wise breakup, and payroll statements. Each report allows you to drill down to the underlying vouchers for detailed insights and modifications. To view the payable and paid amounts of each statutory component of each employee, you can view employee breakup of pay head.

The Pay Sheet report provides a consolidated view of salaries, while the Payroll Register displays the number of payroll vouchers recorded each month.

Before initiating salary payments, you can send a payment advice to the bank with employee details. After processing the payment, you can generate single or multiple payslips and share them with employees.

Record Payment of User-Defined Pay Heads

Are you paying Variable Pay or Bonus to your employees? Create the Variable Pay or Bonus Pay Heads and include them in the salary structure for the applicable period. Since these are one-time payouts, they do not need to be part of the regular salary structure. You can create them with the required statutory details.

Record a separate payroll voucher to process the payment.

Similarly, if you provide food at a subsidised rate or reimburse employee expenses, you can record these using user-defined pay heads such as Canteen Expenses and Reimbursement after creating the respective Canteen Deduction and Reimbursement pay heads.

Record Payment and Recovery of Salary Advances

If salary advances are given to employees, record both the advance and its recovery appropriately. Create a Salary Advance Deduction pay head to track the advance. If the advance is not fully recovered within the same financial year, the balance can be carried forward to the next year.

Record Statutory Payments

At the time of recording the salary, you have already recovered the statutory deductions from the employee, but you also need to record the employer’s contribution.

Create employer contribution pay heads such as PF, ESI, NPS, EPS, EDLI, and PF Admin Charges, and set up the respective payable ledgers to record statutory accruals. Record the employer’s contribution using payroll vouchers and make the corresponding statutory payments. If applicable, also record any interest, penalties, or late fees.

To get the overview of the statutory amount due and the amount paid, you can view the Payroll Statutory Summary and Statutory Pay Head Details.

If you want to view individual reports for each statutory component, TallyPrime provides the option to access them separately.

A. Provident Fund

• You can view and print the monthly statement that displays the contributions made by employees and the employer to PF.
• Additionally, you can view and print different forms of PF, such as Form 3A, Form 5, Form 6A, Form 10, and Form 12A.
• If you don’t want to submit physical returns such as Forms 5, 10, 12A, 3A, and 6A, you can file the Electronic Challan cum Return (ECR).

B. ESI

• You can view and print the monthly statement that displays the contributions made by employees and the employer to ESI.
• Additionally, you can view and print different forms of ESI, such as Form 3, Form 5, and Form 6.

C. Professional Tax

• You can view and print the Professional Tax (PT) Monthly Statement that displays employee-wise PT contribution details for the selected month.
• To know the details of the PT amount payable by the employer, you can view and print the Professional Tax (PT) Computation report.

D. NPS

• You can view the NPS Summary report that displays both employer and employee contributions to the National Pension Scheme.
• To view the details of the employer’s contribution to the NPS Tier-I account and the employee’s contributions to both Tier-I and Tier-II accounts, you can view the Subscriber Contribution Details report.
• You can view employees whose PRAN is not specified in the Employee Master in the PRAN Not Available report.

E. Income Tax

• You can print ITR-1 for filling Income Tax returns.
• To know the details of the salary paid and the tax deducted from the employees, you can view and print Form 24Q and export E-24Q.
• You need to file Annexure I with Form 24Q for all four quarters and Annexure II with Form 24Q only for the 4th quarter.
• You can generate and share Form 16 with your employees, showing the TDS on income under the Salaries head.
• To know the details of perquisites, other benefits or amenities, and profits in lieu of salary, along with their respective values, you can view and print Form 12BA.
• To view the summary of TDS return, you can print Form 27A.
• You can view the TDS Variance report that displays the TDS amount payable but not yet paid for specific employee groups or all employees.
• You can view the Income Tax Computation Report displaying employee-wise income tax computation in the Form 16 format.
• At the time of Income Tax Computation, you can override the exemption and tax values as needed.
• The employee can provide the Exemption and Deduction details to the employer that you can view under Income Tax Declarations.
• You can configure the tax details in the Tax Configuration screen.
• The Salary Projection report shows the Earnings and Deduction pay head values considered for income tax for selected employees.
• You can reconcile all income payment challan details from the Income Tax Challan Reconciliation screen.

F. Gratuity

As part of the statutory report, Gratuity is applicable in India as well as in UAE.

• Create Gratuity pay head for companies in India and also in the UAE.
• You can view the Gratuity Summary report provides details of the gratuity-eligible salary and the total gratuity payable to employees.

G. Other Reports

• PAN Not Available report lists employees who have not furnished their PAN details.
• In the Employee E-mail IDs report, e-mail IDs of all employees can be viewed and updated.
• Employee personal details, contact information, and bank details are available in the Other Records report.

Create Attendance Voucher for Labourers

To record attendance for labourers, first create a Production Type to capture the number of units produced, and then record the details using an Attendance Voucher.

Once recorded, you can view details in the Attendance Sheet report. Additionally, the Attendance Register shows the number of attendance vouchers recorded for each month.

Based on your business practices and the number of units produced by labourers, you can pay wages daily, weekly, or fortnightly.