Salary Setup
Explore all the salary features in RazorpayX Payroll. Optimise your salary structure and enable Form 16s.
On Payroll, you can automate paying your employees accurately and effortlessly. All payments are made directly to the employees' bank accounts and are systematically recorded in the
.With Payroll, salary disbursals are timely, precise and efficient. It can pay your employees in the folllowing ways:
- Execute monthly payroll using .
- Make , as necessary.
- Approve and pay .
- Approve and pay Advance Salary.
- Create and add clawbacks.
- Grant at the time of need.
- Provide to employees.
All of these options are available in the Pay Employees drop-down menu on your
.
To pay salaries to your employees, you must first set up your salary structure for your organisation and configure flexible benefits for your employees. Know more about setting up a
.Watch Out!
We do not recommend setting up a custom salary structure due to the following reasons:
- Most organisations do this to reduce the tax liability of their employees. Payroll, by default, creates an automatically optimised salary structure for this.
- Previously applicable allowances like conveyance and medical allowances are and do not offer any tax advantages.
- If PF and ESI apply to an employee, you must enter the required amount. Doing so can avoid errors in the salary structuring when it is prorated (as per the month of joining/exiting the organisation).
We recommend setting up custom salary structures only when you offer
to your employees.You have the option to change the default salary structure that Payroll has assigned to your company and employees at the time of setting up your account.
You can change the salary strcuture for your organisation at large. To change the salary structure:
- Log in to your .
- Navigate to Admin Options → Settings.
- Go to Payroll Setup → Default Salary Structure and click EDIT.
- Uncheck the option to Use XPayroll's default salary structure and define your salary structure.
This structure will automatically apply to your current and new employees if they are not using an
, as explained below.You can set a salary structure for specific employees. This change applies if your employee is availing a joining bonus or other payroll services like advance salary.
To set a salary structure for an employee:
- Log into your
- Navigate to the People tab on the left menu.
- Click on the employee's name.
- Navigate to Compensation & Perquisites → EDIT and edit the employee's salary structure.
Here you can review the salary figure and change the employees' annual salary, any advance salary due, perquisites, and others.
If you wish to customise the salary structure for more than one employee, select the checkbox next to Create a custom salary structure, and then put in the various amounts under different heads.
Employee benefits, fringe benefits, or flexible benefits are special allowances given to employees that help save expenses and taxes.
It allows employees to choose the benefits they want to avail themselves, and they avail it in addition to their standard wages.
For example, you may give your employees an Internet Allowance, which your employees can use to set up a high-speed broadband connection while working from home.
By making this a flexible benefit, your employees can upload proof of the expense incurred by them and effectively make that part of the allowance tax-free.
To use flexible benefits, you must set up a
for your employees and choose flexi under the Taxable column.
Your employees can upload proof of expenses by going to Reimbursements → Reimburse Flexible Benefits. After they have uploaded their proofs, you can view the
.Watch Out!
Payroll does not validate the proofs uploaded for flexible benefits. Your organisation must verify the documents internally.
You can set the taxable column as yes/no/flexi. Flexi stands for
, and implies that allowances are taxable by default.But the employees can upload any proof of expenses and make some part of their salary partially or fully tax-exempt.
Form 16 is generated after the financial year has ended.
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Form 16s are generated from an organisation's Q4 TDS filing, which is completed in May.
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The exact date on which it is generated can vary depending on factors like government notifications, but usually, it arrives around the month of July.
For example, for the financial year 2020-21 (April 2020 - March 2021), the Form 16s were generated in July 2021.
For Payroll to generate Form 16 for your employees, please ensure that we are handling your 24Q filing. This is enabled by default for all organisations, and you can check it under Settings → TDS Filing Setup.
Payroll automatically informs your employees by email when their Form 16s are generated.
By default, we upload Form 16s without any digital signature as we do not have access to the employees' digital signatures. To upload the signed Form 16s:
- Email us at . We will send the un-signed Form 16s at your registered email.
- Sign the forms with a tool like and email them back to us.
Once we receive the signed Form 16s, we upload them for your employees.
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