Payroll management in Tally Prime enables businesses to maintain employee records, calculate salaries, and generate payroll reports. Configuring payroll settings in Tally Prime is essential for businesses that need to manage salaries, allowances, deductions, and taxes efficiently. This article will guide you through the step-by-step process of configuring payroll settings in Tally Prime with real examples.
1. Enabling Payroll Features in Tally Prime
Step 1: Enable Payroll Features
Go to Gateway of Tally → F11: Features → Payroll Settings.
In the Payroll Settings section, set Enable Payroll to "Yes".
After enabling payroll, you can configure other payroll-related settings, such as employee details, salary structure, and attendance.
Press Ctrl + A to save the settings.
Step 2: Configure Attendance and Payroll Options
In Tally Prime, you can configure the options for managing employee attendance and payroll. This includes setting up attendance types, salary components, and payroll calculations.
Go to Gateway of Tally → F11: Features → Payroll Settings.
Set the Enable Attendance to "Yes" if you want to track employee attendance.
Enable Salary Calculations if you want Tally to automatically calculate salaries based on defined rules.
Press Ctrl + A to save the configuration.
2. Creating Employee Masters
Step 1: Create Employee Ledger
To manage payroll for employees, you need to create employee ledgers in Tally. These ledgers will track individual salary expenses, deductions, and other payroll-related transactions.
Go to Gateway of Tally → Accounts Info → Ledgers → Create.
Enter the employee's name (e.g., "John Doe") in the Ledger Name field.
Select Payroll under Under (this will classify the ledger as a payroll-related account).
Set the Employee Name under the payroll options for easy identification of the employee.
Press Enter to create the employee ledger.
Step 2: Create Salary Components
Tally allows you to create various salary components such as basic salary, house rent allowance (HRA), special allowances, deductions (like Provident Fund, TDS), etc. You need to configure these components to calculate salaries.
Go to Gateway of Tally → Payroll Info → Salary Components → Create.
Enter the Salary Component Name (e.g., "Basic Salary", "HRA").
Select the Type of Component (e.g., "Earnings" for income components like Basic Salary, HRA, etc., or "Deductions" for tax or other deductions).
Specify whether the component is a fixed amount or a percentage (e.g., HRA can be 20% of basic salary).
Save the salary component by pressing Enter.
3. Defining Salary Structure
Step 1: Create a Salary Structure
A salary structure defines how various components will be applied to an employee's salary. For example, you can set up a salary structure that includes basic salary, HRA, allowances, and deductions like PF, ESI, and TDS.
Go to Gateway of Tally → Payroll Info → Salary Structures → Create.
Enter the Salary Structure Name (e.g., "Standard Salary Structure").
Define the components of the salary structure, such as Basic Salary, HRA, and any other allowances or deductions.
Set the default values for each component, for instance, ₹30,000 as the basic salary, ₹6,000 as HRA, etc.
Press Enter to save the salary structure.
Step 2: Assign Salary Structure to Employee
Once the salary structure is created, assign it to individual employees to calculate their salaries accordingly.
Go to Gateway of Tally → Payroll Info → Employees → Alter.
Select the employee name from the list (e.g., "John Doe").
In the Salary Details section, assign the relevant salary structure to the employee.
Press Enter to save the employee details.
4. Recording Payroll Transactions
Step 1: Record Salary Payments
After configuring the payroll settings, you can record salary payments for employees. This will include the calculation of salary components such as basic salary, HRA, and deductions like PF and TDS.
Go to Gateway of Tally → Accounting Vouchers → Payment.
In the Particulars field, select the bank or cash account from which the salary will be paid.
For each employee, select their respective salary components (Basic, HRA, etc.) and enter the amounts accordingly.
For any deductions like PF or TDS, create ledger accounts and enter the deducted amounts.
Press Enter to complete the salary payment entry.
Step 2: Generate Payslips
After recording the salary payments, you can generate payslips for the employees, detailing the salary breakdown.
Go to Gateway of Tally → Display → Payroll Reports → Payslip.
Select the employee and the period for which the payslip needs to be generated.
The payslip will display the components of the salary, such as Basic, HRA, and deductions like TDS, and the net pay to the employee.
You can print or export the payslip as needed.
5. Generating Payroll Reports
Step 1: View Payroll Reports
Tally Prime provides detailed payroll reports that give insights into salary payments, deductions, and tax calculations.
Go to Gateway of Tally → Display → Payroll Reports.
You can view reports like Employee Pay Slip, Salary Register, Pay Head Summary, and Payroll Audit Report.
These reports provide a breakdown of all payroll transactions, including earnings and deductions.
6. Conclusion
Configuring payroll settings in Tally Prime is essential for businesses to manage their employee salaries, allowances, and deductions efficiently. By following the steps outlined in this article, you can easily set up employee records, create salary structures, and generate payslips and payroll reports. Tally Prime makes payroll management easier and more streamlined, helping businesses stay compliant and manage their payroll with ease.