Salary Components

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Salary components are the different parts that make up an employee’s total salary. These include earnings, deductions, and attachment of earnings orders / arrestments, which together determine the gross pay and the final take-home pay of your employees.

Go to Settings and click Salary Components under Setup & Configurations. The page has three tabs: Earnings, Deductions, and Attachment of Earnings Orders / Arrestments.

Earnings

Earnings refer to any type of pay an employee receives during a pay period (such as weekly, fortnightly, or monthly). Earnings may be taxable or non-taxable, depending on the earning type and the applicable regulations.

By default, Zoho Payroll includes common UK earnings such as Basic Pay, overtime and double time pay, Bonus, Commission, Leave Encashment, Pay in Lieu of Notice (PILON), Statutory Redundancy Pay, and statutory payments (for example Statutory Sick Pay and Statutory Maternity Pay). Pre-configured default earnings cannot be deleted.

In addition to the default earnings, you might need to create custom earnings specific to your organisation. For example, if you offer a unique allowance or a performance-based incentive, you can add new earnings to Zoho Payroll. Once added, these custom earnings can be assigned to employees, and you can edit, mark as inactive, or delete them as needed.

Add an Earning

To add a new earning:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the Add Component dropdown at the top right and select Earning.

3. Select the Earning Type.
4. Enter the Earning Name. This name must be unique from other earnings.
5. Enter the Payslip Label. This is how the earning will appear on the employee’s payslip.
6. Select or deselect This is a taxable earning based on your preference.
7. Select Mark this as Active if you want to make the earning available for upcoming payrolls.
8. Click Save.

Once saved, this earning can be used in payrolls and assigned to employees.

Edit an Earning

To edit an earning:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the More icon next to the earning and select Edit. You can also click the earning name.
3. Make the necessary changes.
4. Click Save.

The earning will be updated.

Mark an Earning as Inactive

When an earning is no longer relevant but you want to retain its history or reuse it later, you can mark it as inactive instead of deleting it. This keeps the record while preventing its use in new payrolls.

To mark an earning as inactive:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the More icon next to the earning.
3. Select Mark as Inactive.

The earning will be marked as inactive, and you won’t be able to associate it with employees in future payrolls.

Delete an Earning

To delete an earning:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the More icon next to the earning.
3. Select Delete.
4. In the popup that appears, click Yes.

The earning will be deleted.

Deductions

Deductions refer to amounts subtracted from an employee’s pay to arrive at their final take-home pay. These can be for pension contributions, salary sacrifice arrangements, repayment of an advance, or other employee-related items.

Court-ordered deductions, such as an Attachment of Earnings Order (or an arrestment in Scotland), are set up separately under Attachment of Earnings Orders / Arrestments. All deductions must be applied in line with the relevant UK regulations.

In Zoho Payroll, you can add new deductions, assign them to employees, and manage the following actions:

• Edit a deduction
• Mark a deduction as inactive
• Delete a deduction

Add a Deduction

To add a new deduction:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the Add Component dropdown at the top right and select Deduction.

3. Enter the Payslip Label. This is how the deduction will appear on the employee’s payslip.
4. Under Select the deduction frequency, choose:
   • One-time deduction, or
   • Recurring deduction for subsequent Payrolls
5. Select Mark this as Active to make the deduction available for payrolls.
6. Click Save.

The deduction will be created, and you can assign it to employees as needed.

Edit a Deduction

To edit a deduction:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the More icon next to the deduction and select Edit. You can also click the deduction name.
3. Make the necessary changes.
4. Click Save.

The deduction will be updated.

Mark a Deduction as Inactive

When a deduction is no longer relevant but you want to retain its history or reuse it later, you can mark it as inactive instead of deleting it. This keeps the record while preventing its use in future payrolls.

To mark a deduction as inactive:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the More icon next to the deduction.
3. Select Mark as Inactive.

The deduction will be marked as inactive.

Delete a Deduction

To delete a deduction:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the More icon next to the deduction.
3. Select Delete.
4. In the popup that appears, click Yes.

The deduction will be deleted.

Attachment of Earnings Orders / Arrestments

An attachment of earnings is a deduction you make from an employee’s pay when a court or agency instructs you to. It recovers money the employee owes directly from their wages. Once you receive an order, you’re legally required to make the deduction, apply it from the correct date, and pay it to the issuing body. You set these up under Salary Components, and Zoho Payroll applies them automatically each time you run payroll.

When Is an Attachment of Earnings Used?

You’ll receive an order from a court or agency when an employee has a debt or obligation to repay. Common cases include:

The Order Type you select tells Zoho Payroll how to calculate the deduction, for example a fixed amount or a percentage based on protected earnings. It also sets how the order ranks against any other orders the same employee already has.

Add an Attachment of Earnings

To add an attachment of earnings:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Click the Add Component dropdown and select Attachment of Earnings Orders / Arrestments.
3. Enter the following details:

4. Select Mark this as Active if you want the attachment available for payrolls.
5. Click Save.

The attachment of earnings will be created, and you can assign it to the relevant employee.

Edit an Attachment of Earnings

To edit an attachment of earnings:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Under Attachment of Earnings Orders / Arrestments, click the More icon next to the attachment and select Edit. You can also click the attachment name.
3. Make the necessary changes.
4. Click Save.

The attachment of earnings will be updated.

Mark an Attachment of Earnings as Inactive

When an attachment is no longer needed but you want to keep the record, you can mark it as inactive.

To mark an attachment of earnings as inactive:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Under Attachment of Earnings Orders / Arrestments, click the More icon next to the attachment.
3. Select Mark as Inactive.

Delete an Attachment of Earnings

To delete an attachment of earnings:

1. Go to Settings and click Salary Components under Setup & Configurations.
2. Under Attachment of Earnings Orders / Arrestments, click the More icon next to the attachment.
3. Select Delete.
4. In the popup that appears, click Yes.

The attachment of earnings will be deleted.