User Guide

Payroll
Management
Table of Contents

Table of Contents.................................................................................................................2
Pay element set up..............................................................................................................8
Transaction For pay elements............................................................................................11
Loan and Advances............................................................................................................16
Loan Pre-payment..............................................................................................................21
Social Security ..................................................................................................................23
Employee Management.....................................................................................................29
Leaves Profile....................................................................................................................30
EOS (End of service benefit).............................................................................................32
Transaction for the EOS.....................................................................................................38
Provisions...........................................................................................................................41

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PERIOD SETUP

(Payroll-Set up->Payroll Calendar)

First step towards setup of Payroll management is to define payroll

periods for calculation of salary of employees in different branches
(head office/ factory) of any organization using this form. It suits
requirement of all organizations such as single and multi-location
organizations, organizations with centralized as well as
decentralized management, etc.

This form Provides Interface to set calendar for payroll processing.

Field Description

Calendar Code- In this field calendar code is defined which eventually

get linked to employee at employee master. If a company processes
the salary differently for those working in factory than those working
in Head office, two calendar codes are to be defined.

Calendar Description- This field is used to describe the code of

calendar.

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Payroll Period- This field is used to define payroll period for calendar
code. It may be weekly, monthly as per requirement of company.

Default working days- This field defines default working days for
associated calendar. Normally it’s 26.

Calendar working days- Instead of fixing default working days in the

field “Default working days”, it can be regulated on the basis of
working days as per calendar set up. In such case Default working
days field is of no use.

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Set up Calendar dates (PayrollSet upPayroll
calendarPress Button calendar dates

Payroll periods can be set up from the button Calendar Dates, which
can further be divided into days, months, quarter etc. to suit the
different payment period.

Field Description

A date for Year- It denotes the year for which calendar dates are to
be created.

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Dates- Start date of calendar dates. It shows first date of first
calendar month. In the rest of months, system automatically creates
first date of succeeding months.

Payroll Process date- It defines payroll process date. For the first
month of calendar month payroll process date is defined. For the
succeeding months, a date automatically comes and date will remain
same what defined in first month.

Generate- This button used to generate the Start date, End date and
payroll process date for the year defined in field “date of year”. All the
dates appear on the basis of dates defined for the first month.

Set Up (PayrollSet upPayroll calendarSet up)

This form is used to define weekly holidays, public holidays Rest

vacation and shift associated with particular calendar code.

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 Shift is used to define working hours. It may be different for official
days than those to off days. Eventually it helps in calculating over
time.

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PAY ELEMENT SET UP

(Payroll Set upEarning and deduction)

Earning

Field Description

Post to Sub ledger- This field is normally used for the “one time”
type of element. Only checked pay element get reflected in Inquiry
related to Transaction at Employee master.( Employee Master-
Inquiry- Transaction)

Part of Pay Slip-This check box is used to show the pay element in
Pay slip.

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Included In Gross Salary—this field is used to make the Pay
element part of Gross salary. All the equation where gross salary is
used, only those elements will be taken into accounts which are part of
Gross Salary.

General tab provide details for attachment of particular pay element

for pay slip, Gross salary, Leaves and Payment terms. User can define
pay element to be used for calculation of different situations as
enumerated above.

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 Field Description

Period- Field is used to define payment terms. If earning is

periodic (like Basic), then set up would be periodic and either
monthly or as per calendar Period. If organization process the
salary on monthly basis, then set up would be periodic and Monthly
or calendar period. For the organization having two types of
calendar, lets weekly and monthly, then set up would be Periodic
and calendar period. System automatically process as per the
calendar period to which employee is attached. In the same
fashion, all the periodic deductions are periodic and monthly (or
calendar period) and occasional deductions are one time monthly.

Is equation- This check box is used to activate the equation

field.

For the purpose of dependency of any element over other,

equation field is provided.

Let House allowance is 10% of Basic. Against House allowance, an

equation can be set.

Equation of Leave- In calculation of leave amount, particular pay

element will get calculated as per the equation set here.

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 Export to Bank- If particular allowance is to get exported bank i.e.
it would be part of export to bank report, then this check box is to
be clicked.

Post Directly to Ledger- This field is used to post the entry

against this pay element into ledger. Clicked pay element directly
hit the ledger set on posting profile.

Loan- If particular element is related to Loan (Earning) then, this

check box is to be clicked.

Flight ticket- If particular pay element is used to process the flight

ticket, then this check box is to get clicked.

Restricted with Grade- If pay element is related to particular

grade only, and then this check box is to get clicked.

Same fields are used for different kind of deduction.

TRANSACTION FOR PAY ELEMENTS

Pay elements can be filtered on two parameter -Periodic and One

time.

Periodic Elements-

Go to Employee masterPayroll Set Up

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Click on Basic salary.

Field Description

Pay Code- It comes automatically set up pay code.

Earning Description- This is description of Pay Code.

Amount- Amount assigned to employee for basic salary.

Currency- This comes automatically from Payroll Parameter.

Start date- This indicates start date when this amount comes into
existence.

End date- Last date of the amount. This field is useful to maintain the
history of pay code and assigning new amount as a result of appraisal.
After putting end date, press Ctrl N to create new record with new
date of commencement of basic salary.

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In the same way other pay codes can be assigned to employee.
However only those pay codes can be selected which are of Periodic
type.

Path—Employee masterSelect employee-->Press Button Payroll Set

up--> Click on “Periodic Earning”.

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Similarly Periodic Deduction can be assigned through clicking on
Periodic Deduction.

One time Transaction

Those transaction which are occasionally done, get processed

through-

PayrollTransactionEarning (or deduction)

Press ctrl N to create new transaction.

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Field Description

Payroll Transaction Number- This field comes automatically. Unique

identification no for transaction.
Pay Code- Select Code for transaction from look up (List). Only those
pay codes are viewed having type “One Type”.

Transaction Type-It comes automatically. It describe the Pay code,

Description- User defined remark.

Date—this is date in which transaction is being processed.

Press button -“Transaction Line”

Field description-

Employee—select employee from List.

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Earning date—this date comes automatically from Header.

Amount—Amount which is to be given to employee selected against

pay code selected on transaction Header.

Scheduling- This field is used in determining Amortization schedule

,in the event of pay code select is of Loan type( set up pay code
having check box Loan is checked).
This field remains inactive for all pay code except loan type.

Having filled all the information, press button “Go to Transaction

Header”. Afterwards press button “Post’. A massage comes regarding
posting of transaction.

LOAN AND ADVANCES

Loan and advances can be processed through form one time

transaction.

Path-

PayrollTransactionearning transaction

Select pay code of Loan type intended.

Go to Transaction Line, put the loan amount.

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Press button “Go to Transaction Header” and then press the button
Post to post the transaction.
Having got the transaction posted, press button “Transaction Line” in
order to process the deduction against loan.
Press button “scheduling” which gets activated only for pay code
indicating Loan.

After pressing Scheduling Button, A form gets opened. Press Ctrl N

and select pay code from list value.

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Field Description

Pay code- pay code assigned for loan deduction.

Deduction Name- Value comes automatically to describe the pay

code selected.

Start date- The date put in here is used as a base for starting
deduction of installment amount from salary.

To date – This field is optional.

Calculation Equation—Equation can be set in two ways- Either to

calculate schedule time or Schedule Amount. In order to calculate
Schedule times, radio button “Calculate Schedule Times” is to get
clicked. Afterwards, put the amount in “Schedule amount” field and
then press button Approve. Pay counts field gets filled automatically.

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Amount exceeds the Loan amount in the last installment, get shown in
field Balloon payment. In order to fix pay counts and then generate
schedule amounts, “Calculate Payment “radio box is to get clicked.
Put pay counts in the field “Pay Count”. Press button “Approve”.
Schedule amount gets filled automatically.

Press Button- Installment—Amortization

Installment schedule gets displayed.

Shift button is used to shift deduction date of particular installment to

next month or further..

Payroll process will display deduction as an installment amount.

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Page 20 of 55 Payroll Management users guide
LOAN PRE-PAYMENT

Dynamics provides functionality to set off loan amount (Partially or

wholly) manually.

Path-> Payroll TransactionLoan Encashment

A form gets opened-

Press ctrl N to create new record.

Field description

Document number- This is auto generated number. Once new line

gets created through Ctrl N, number gets generated automatically.

Date- - Date in which transaction is created to repay the loan.

Employee — Select employee whose loan is to get repaid.

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Loan reference – All the loan references associated with employee
get shown in this field through look up. Select relevant reference
number.

Loan Code – It comes automatically after selection of loan reference

number.

Remaining Amount- The value comes automatically. It reflects

amount yet to get paid.

Amount paid—this value comes automatically. Once the loan amount

settled on Details tab, total of settled amount gets replicated in this
field.

Go to Detail Tab and click the check box “selected” against amount to
be paid.

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Total of selected amount get shown in Overview tab

Press the Post button to have financial impact of the transaction.

In the same manner the advance transaction can be settled.

SOCIAL SECURITY

PayrollSet upEarning and DeductionSocial security

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Field Description

Pay Code- Pay code, a unique identification number for social security
which comes automatically after pressing the ctrl N on the form.
Description - Description of pay code, like social security or pension
etc.
Disabled - This check box is used to make the pay code disable for
further transaction.
Part of Pay slip- Once check box is clicked; pay code will get
displayed in the salary slip.
Post to sub ledger- check box provide option to post the transaction
through ledger or sub ledger. Once clicked, transaction will get
displayed in the Inquiry against particular employee select at
employee master. Eventually it can be settled through payment
journal.

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Click on General Tab

Field description

Is Equation- This check box is used to make equation field

enabled or disabled. Clicked one, make the equation field enabled.
Equation- Equation for calculation of social security.

Social Insurance salary will be added to basic- This check box

provides option to either exclude social insurance salary in the
component used for calculation of social security or exclude it.
Social Insurance salary is defined in payroll tab (last tab) of
employee master.

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 Maximum social security salary – This field is used to impose
maximum limit on which calculation will be done. If sum of
component used in equation (lets basic salary) and social salary
exceed the amount defined in this field, then calculation will be
carried out at the amount defined in this field. Otherwise,
calculation will be done at the amount comes from addition of
salary component used in equation and social salary defined in
employee master (payroll tab).

Restricted with grade- this check box is used to make the social
security applied to particular grade only. In such case social
security needs to get defined to grade at which it is applicable and
eventually grade will get attached against particular employee to
whom this benefit is to be given (at employee master).

Transaction for social security

Social security is kind of periodic deduction. So at employee master,

press the button Payroll set up and then periodic deduction.

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At Periodic deduction form select pay code for social security. Put the
start date of transaction. Deduction amount field will remain
untouched, since calculation is carried out as per equation defined at
social security set up. (Set upearning and deductionSocial
security)

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 If equation is set on basic salary (let 100) and there is no social
salary, so social security is basic*0.7= 7 as a deduction shown in
salary slip.

However if social salary is defined, let 2900, then it will get added
to basic salary and total would be defined. But at the set up
maximum amount entitled for such calculation is 2500. So
calculation will be carried out at 2500.( 2500*0.7= 175)

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EMPLOYEE MANAGEMENT

Payroll Information - User can maintain the official information like

Date of joining (Mandatory), Leave profile for leave entitlement at
overview tab.

Click Payroll tab to feed information like calendar code, Benefit profile.

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LEAVES PROFILE

Employee leave entitlement during a year can be defined

through Leave profile.

PayrollSet upLeave Profile

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Profile code: Unique identification of profile.
Name: Description of Profile code.

Press button “Profile Details”

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Years from-This field describe when employee assigned to this
profile, entitle for this profile. Normally this starts from joining date of
employee, so “0” is used to fill this field.
To- This field set the year up to which the selected leave profile
remains active.
Leave balance- this field shows yearly entitlement for employee
attached to the particular leave profile.

The leave profile is attached to employee at employee master.

Calculation is done on day to day basis (Leave entitlement/365*days
of experience- from 1-06-2010 to 19-11-2010 -70/365*172=32.99)

EOS (END OF SERVICE BENEFIT)

PayrollSet upEOSEOS Benefits

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Field Description

Pay code- Unique identification. It comes automatically.

Description - this field describe pay code.

Go to General Tab

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Field Description

Maximum Benefits- This field used to define the clause mention in

labor law which entails that total of end of service benefit should not
exceed one and half year of remuneration for the employees who are
paid on monthly basis.
Calculate due Leave balance –Equation set in this field is used for
the calculation of leave liability.
Min Year to Calculate- As per labor laws workers entitled to have
half of the EOS benefits, provided their period of service reaches not
less than three years. To map this stipulated labor law this field is
used.
Calculate Year Partial – As per labor law workers entitled to a
benefit for the fraction of year in proportion to period of service. If this
check box is clicked to “Yes”-then labor law is mapped.
Override the period- This check box if not clicked then system
calculates amount as per defined in slab. Like if worker terminate the
contract after 10 year of service. Then first five year worker is entitled
to benefit of 15 days remuneration for the first five years and for the
remaining five years he is entitled for the remuneration of the 30 days
for each of the last five years. However if check box is clicked then
system override the period defined and calculates the yearly benefit as
per equation set for periods more than five years.
Notice period is Paid -- If the check box is checked then, notice
period get paid like normal working days.

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Select Particular pay code (EOS Accrue denotes the way of calculation
of End of service benefit) then Press button “Setup” and subsequently
“Period set up”

A form gets opened-

Field description
From Year-This indicates minimum experience year when calculation
is to get started.
To Less than Years- This is upper limit till calculation will be carried
out.

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Press button EOS set up

Field description

To Year- This field set the year up to which yearly benefit amount, as
per equation in “Yearly Benefit Amount” field, will get calculated.
(like in above depicted screen shot to year is 5, which connotes up to
5 year of experience, calculation will be done on the basis of equation
in yearly benefit amount field)
Yearly benefit days – this shows the days of entitlement for
remuneration of EOS up to period mentioned in to year field. In screen
shot the first slab shows that workers shall be entitled for 15 days
remuneration for each of the first five years of service and 30 days of
remuneration every year thereafter as per second slab.
Yearly benefit Amount-This field used to set the equation for the
calculation of EOS benefit.

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Set Up for Resignation

If worker terminates the contract, he is entitled for half of the end of

service benefit if period of service reaches not less than three years
and not more than five years. In the event where period of service
reaches five years and less than ten years , worker shall be entitled to
two third of benefit and if the period exceeds 10 years , worker shall
be entitled to entire amount.

Path- Set up-EOS –EOS benefits-Select pay code for resignation-

Click on Period Set Up-click on EOS Set up
Define the value in “To year” and corresponding “Yearly benefit”.
Subsequently set the equation in “Yearly benefit Amount” field as
depicted under shown screen shot.

Similarly set up for Termination can be done through same path by

selecting pay code meant for termination.

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Loan and credits owed by the worker shall be deducted from

the End of service benefit.

TRANSACTION FOR THE EOS

Path-TransactionEOSEmployee End of service benefit

Press ctrl N to create new line, Select employee and Pay code subject

to case of leaving (Resignation, Termination, and Dismissal).

Subsequently put the Resignation date and EOS date. Save the record.

Afterwards go to general tab and press the button “Calculate”.

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Field description

Experience Days – It displays total experience days taken into

account for the calculation of EOS benefit amount. It comes
automatically once calculate button is pressed.

Benefit Amount- This field displays the EOS benefit amounts. It

comes automatically having got calculated as per equation set for the
selected pay code in the set up of EOS.

Leave Balance – Leave balance displays leave not utilized.

Leave Balance amount- Leave balance amount comes as per the

calculation set for the same at the set up for pay code EOS accrue at
General tab.

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Salary till Date- This field shows the salary amount to be paid along
with EOS and Leave balance amount.

Total Amount- This field displays the amount comes after addition of
EOS benefit amount, Leave balance amount and salary till date.

Additional paid days—this field is used to put additional paid days in

addition normal paid days. Having put the additional paid days, press
Enter, amount gets calculated automatically and subsequently gets
added into total.

Paid notice period- this field is used to put paid notice period.

Additional Amount-To feed additional amount which gets added to

total amount once amount is put and then “Enter” is pressed.

Adjustment- This field is used to do manual adjustment. Amount

gets either added or deducted from Total amount, once amount is put
in and enter button is pressed subsequently.

Due Installment- This field gets filled automatically if any installment

is due for the employee concerned. “Total” field gets adjustment
accordingly.

Reimbursement- If any amount is to get reimbursed from employee

gets displayed here and Total field gets adjusted accordingly.

In order to view the EOS, salary and Leave balance amount press
button Salary details.

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Having done the process, press button post to have financial

transaction of the same. Posted transaction can be voided through

void button.

PROVISIONS
Provisions are important to figure out liability of organization. Two
kinds of provision are dealt in Dynamics system- leave provision and
EOS provision.
Leave provision

Path—PayrollPeriodicProvisionPosting leaves Provision

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Field Description (Header)
Trans Number—Unique identification number which comes
automatically.
Description— this field is used for the description of the transaction,
like leave provision.
From Date- This is start date for calculating the provision. (Like from
01-06-2010)
To date-- This field is used to put date up to which provision is to get
calculated.
Post- this check box automatically gets clicked, once the transaction
gets posted.
Expense (Debit Amount) - this is used to define expense ledger
account (debit) for the transaction selected.
Provision (Credit account)-this field is used to define the ledger
account in which transaction will get credited.

Having filled all the above information into header section of the form,
Press button-“Generate”. As a result of this, line section of the form
gets generated.

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Field description
Employee - This is employee Id for all the employee for whom leave
liability has been created due to Generate button.
Date - date till the liability is created.
Total amount-This field displays leave liability amount from date of
joining to till date filled in Date field.
Total balance-This field displays total leave accumulated from date of
joining to till date displayed in Date field.( System calculates leave
days accumulated ,irrespective of leave taken during this duration.)
Amount posted- This field shows leave liability during the period for
which transaction is created at Header section of the form.(between
“from date” to “To date” at header level).
Balance Posted- This field shows the Leave balance during the
period.

All the fields get filled automatically due to action of Generate Button.

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Calculation
Total balance- let joining date is 01-06-2010.Employee leave
entitlement is 70. Transaction is to be created from 01-07-2010 to 31-
10-2010(153 days).Calculation will get done as per the Benefit
profile selected for the employee on Employee master at payroll
tab.

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Total Amount will get calculated as per the equation set for the benefit
code selected (lets 8)
Equation of benefit code can be seen through path- Setup-EOS-EOS
benefit-Select pay code (lets 8) and then go to General Tab

(Equation can be set

as per requirement)

If gross salary is 120.

Total liability Amount from 1-06-2010 to 31-10-2010(153 days)
120/30*leave days or Total balance
Total balance -Leave entitlement/365*total days from joining to till
31-10-2010. (70/365*153= 29.342)
So Total amount is 120/30*29.342= 117.367
Amount Posted- This amount shows liability realize during 01-07-
2010 to 31-10-2010.This comes either by deducting Total amount
from amount realized from joining to one day before start date of
transaction i.e. from 01-06-2010 to 30-06-2010 or deducting Total
amount of current transaction from total amount of transaction created
just before the current transaction.
Here, leave from 01-06-2010 to 30-06-2010 is 70/365*30=5.753
Amount- 120/30*5.753= 23.01

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So amount posted = 117.367-23.01=94.35
Balance posted- 29.342-5.753= 23.589
If transaction is created from 1/11/2011 to 30/11/2011
Total amount=140.38
Total balance- 35.096
Amount posted=Total amount- Total amount from Previous
transaction I.e. 140.38-117.3667=23.013
Balance posted-Total balance -Total balance from previous
transaction
35.096-29.342=5.753

Once the transaction gets generated at line section, press the button
post. Created JV can be viewed through Voucher button

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Even posted transaction can be voided by selecting transaction and
subsequently pressing the button void.

EOS Provision
Path- payroll Provisions EOS Benefits

Header form displays the same fields as in the case of Leave posting
provision.
Mode of calculation subject to set up of Benefit profile attached with
employee.
Benefit profile set up is done in EOS set up and that too in line with
the Kuwait labor laws.

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 In order to view the equation, path is- PayrollSet UpEOSEOS
benefits
A form gets opened-
Select pay code - EOS accrue-- Press the button SetupPeriod set up
Then press button EOS set up in the opened form.

If basic salary (as required in equation) is 100. Employee joining day is

01-06-2010. Lets EOS provision is to be calculated from 01-06-2010 to
31-10-2010(for 153 days).
As per equation total amount would be calculated for the fraction
of year in proportion to the period of service.

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So calculation would be- [(100/26)*15*/2]153/365=12.09
Total amount-12.09(as in the above screen shot for employee 7272)
Total Balance- This field shows total experience from joining date to
“To date” mentioned in the header section of form. (Lets 31-10-2010
then total balance are 153, if date of joining is 01-06-2010).
Amount posted- This field shows the amount which gets realized
during period “From date” and “To Date” mentioned in Header
section. It gets calculated by deducting Total amount from current
record to the Total amount of previous record.
Balance Posted- The experience days for which Amount is posted IS

shown in this field. Like in instance mentioned above it would be 153.

As in the case of Leave provision, press the Post button to post the
transaction and view the JV created through button Voucher.

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Salary Process

Payroll->PeriodicProcess PayrollProcess Payroll

Select Calendar Code at the top of form.

At the bottom of form select period for which salary is to get

processed-
Go to employee tab

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Posting profile field select either Group, Table or All

Group- For a group of employee- Then at reference select group for

which salary is to get processed.

Table- For particular employee- Then at reference select employee for

which salary is to get processed.

All - For all employees

Press the button - Process Payroll

Salary will get processed.

In order to view salary Go to Inquiry folder- Payroll Transaction- select

calendar code and period - press the button advance and then at the
top of the form select employee .At the bottom of form salary record
of selected employee gets displayed.

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Press the button Print, and then subsequently Employee Pay slip

Pay slip of employee gets generated.

Posting Profile

Set Upposting profile

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Top of the form automatically gets filled as and when any pay element
gets created.

At the bottom of form like in case of payroll processing, At posting

profile field select either table , group or all as per requirement and
accordingly fill the ref Num field.
Put account code as per the expense or earning of company and set
either debit or credit accordingly.

In same fashion, on payable select account code for counter entry of

expense code and accordingly set either debit or credit.

Payroll Voucher

Path- Payroll Periodic Process payroll Create payroll

Voucher

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Select calendar code. Then press OK

Fill From date and To date, then press Ok. Voucher gets created.

In order to view the voucher,

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Go to Periodic Payroll Voucher

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