TALLY.

ERP 9 PAYROLL
TALLY.ERP 9 PAYROLL IS FULLY INTEGRATED
WITH ACCOUNTING.

TALLY.ERP 9 PAYROLL ENABLES USERS TO SET

UP, IMPLEMENT AND PROCESS PAYROLL, AS PER
THE ORGANIZATION’S REQUIREMENTS.

TALLY.ERP 9 PAYROLL ALSO PROVIDES

MANAGEMENT RELATED INFORMATION
REPORTS AND STATUTORY FORMS AND
REPORTS IN THE PRESCRIBED FORMATS VIZ.,
PAYSLIP, PAYROLL STATEMENTS, ATTENDANCE
AND OVERTIME REGISTERS, GRATUITY, EXPAT
REPORTS AND SO ON.
Payroll is a default feature available in Tally.ERP 9. Enabling Payroll is a two step simple
process:

 Enabling Payroll
 Enabling Payroll Statutory (for India)
 Go to Gateway of Tally > F11: Features > F1: Accounting Features
 Tab down to Cost/Profit Centres Management section
 Set Maintain Payroll to Yes
 You can set More than ONE Payroll / Cost Category to Yes to allocate Employee
Cost, by creating separate Employee Categories
To enable Payroll Statutory feature,

Go to Gateway of Tally > F11: Features > F3: Statutory & Taxation

Note: The Payroll Statutory Features are available only for India. For all other Countries,
this option is not available.

 Set Enable Payroll Statutory to Yes

 And Set/Alter Payroll Statutory Details to Yes
In Payroll Statutory Details screen,

 Under the heading Provident Fund:

 Enter Company Code as allotted by the PF department

 Enter Company Account Group Code as specified by the PF department
 Enter Company Security Code as specified by the PF department

 Similarly, for ESI:

 Enter Company Code as allotted by the Employee State Insurance Corporation

(ESIC)
 Enter the name of the ESI Branch Office
 Enter the number of days to be considered for the calculation of daily wages and
monthly Gross amount for ESI benefits as Standard Working Days (per month).

 Under Income Tax:

 Tax Assessment Number: Specify the 10 digit TAN assigned to the Employer
 Income Tax Circle/Ward: Specify the name of the Income Tax Circle, to which the
Employer is associated
 Deductor Type: Select Government for a company belonging to central or statement
governments for all others select others.
 Name of Person Responsible: Enter the name of the person responsible for TDS
deduction in the company.
 Son/Daughter of: Enter father's for the person responsible for TDS deduction in the
company
 Designation: Specify the official designation of the person responsible for TDS
deduction
The Payroll Info. menu allows to create various Payroll related masters required for
calculating earnings and deductions for employee's.

Go to Gateway of Tally > Payroll Info.

An Employee Group allows you to group/classify the employees in a logical manner as
required.

The Salary structure can be defined at the Employee Group level. For example, you can
create the Salary structure based on the department or function such as Production, Sales,
Administration and so on, or by designation such as Managers, Supervisors, Workers and so
on.

Creating Single Employee Group

To create a single Employee Group (e.g. Sales),

Go to Gateway of Tally > Payroll Info. > Employee Groups > Create (under Single
Group)

 Select the required Employee Category from the List of Categories in the field
Category.
 Enter the Name of the Employee group.
 Select the required group from the List of Employee Groups in the filed Under.
Employee Master records the relevant information about the employee. Tally.ERP 9 also
allows you to enter the Statutory, Expat and Contract details of the employees. To enter
Statutory related information in the Employee Master refer Payroll Configurations section.
Creating Single Employee
To create an Employee under the Employee group, Sales:
Go to Gateway of Tally > Payroll Info. > Employees > Create (under Single Employee)

1. Enter the Name of the Employee

2. Select the Employee Group in the field Under
3. Enter the Date of Joining
A Payroll Unit is similar to Unit of Measure used in the Inventory module. In Payroll, on the
basis of Payroll Units, Pay components are calculated for a given period. In Tally.ERP 9, you
can create Simple as well as Compound Payroll Units measured on Attendance / Production
Types such as Time, Work or Quantity.

Creating Payroll Simple Unit

Go to Gateway of Tally > Payroll Info. > Units (Work)

1. Select Type as Simple

2. Enter the Symbol for the Unit
 3. Enter the Formal Name
4. Provide the Number of Decimal Places for the Unit if you want to use the Unit in
fractions

Creating Payroll Compound Unit

Similarly, create Compound Units for Payroll, comprising of two payroll Units. For eg., Box
of 10 Nos, Dozen of 12 Pcs, Hr of 60 Mins etc.

Go to Gateway of Tally > Payroll Info. > Units (Work)

The Attendance/Production Type may be:

 Attendance/Leave with Pay: should be used to record the positive attendance and
Leave with Pay (e.g. Present, Leave, Sick Leave etc.)
 Leave without Pay: should be used to record the negative attendance (e.g. absent,
Leave Without Pay etc.)
 Production type: should be used to record the Production details (e.g. Piece
Production, Overtime Hours, and so on.)
  User Defined Calendar Type: should be used to Create the User Defined Calendar
which can be later used to specify the variable number of days for each month. e.g. 25
days in Jan, 24 days in Feb, 26 days in Mar and so on.

Create Present Attendance Type to record the positive Attendance.

Go to Gateway of Tally > Payroll Info. > Attendance/Production Types > Create

1. Enter the Name of the Attendance Type

2. Select Primary from the list for the field Under
3. Select Attendance/Leave with Pay as the Attendance Type
4. The Period Type appears automatically

Create Overtime Production Type to record the Overtime details.

Go to Gateway of Tally > Payroll Info. > Attendance/Production Types > Create

1. Enter the Name of the Production Type

2. Select Primary from the list for the field Under
3. Select Production as the Attendance Type
 4. The Unit field will appear, select the appropriate type of unit from the list

To create an Attendance based Earnings Pay Head (e.g. Basic Pay),

Go to Gateway of Tally > Payroll Info. > Pay Heads> Create

1. Enter the Pay Head name in the Name field.

2. Select Earnings for Employees as the Pay Head Type from the List of Pay Head
Types.
3. Select Indirect Expenses from the List of Groups in the Under field.
4. Set Affect Net Salary to Yes if you want the Pay Head to affect the net salary.
5. Name to appear in Payslip field is defaulted with the Pay Head Name entered. You
can change the same, if required.
6. Set Use for Gratuity to Yes, if you want this Pay Head to be considered for Gratuity
calculation.

9. Select On Attendance in the Calculation Type from the List of Calculation drop
down.
10. If Attendance is selected as the required Calculation Type, select the required
method of recording the Attendance.

o To deduct the Salary for the number of days an Employee is Absent (Leave
without Pay),

o Select Not Applicable for Attendance / Leave with Pay field

o Select Absent in the field Leave without Pay field

2. Select the required Calculation Period from the List of Calculation Periods.
3. Based on the Calculation Period, you can select and enter the details for Per Day
Calculation Basis as User Defined or Calendar Period or User Defined Calendar
Type.
4. Select the Rounding Method from the list if applicable.
5. In the Limit field, enter the required Rounding Off Limit.
To create a Computation based Pay Head (e.g. House Rent Allowance Pay Head),
Go to Gateway of Tally > Payroll Info. > Pay Heads > Create

1. Enter Pay Head name in the Name field.

2. Select Earnings for Employees as the Pay Head Type from the list of Pay Head
Type.
3. Select Indirect Expenses from the List of Groups in the Under field.
4. By default, Affect Net Salary is set to Yes. Type No, if you do not want this
component to be included in the Pay Slip.
5. By default, the Pay Head component name entered in the Name field will appear in
the Pay Slip, if you want to change the default pay head component name then type
HRA in Name to appear in Payslip field.
6. By default, Use for Gratuity is set to No. Set this option to Yes, if you want this Pay
Head to be considered for Gratuity calculation.

9. In the Calculation Type field select As Computed Value from the List of
Calculation, a new field Calculation Period will appear, which is set to Months by
default.
10. Select the required Rounding off method from the Rounding Methods list and enter
the required rounding limit in the Limit field.
11. In the Compute field, select On Specified Formula from the Computation On list.
12. The Compute sub-screen appears,
In the Pay Head column select Basic Pay from the List of Pay Heads.
Select End of List to return to Pay Head Creation screen.

11. In the Effective Date field, enter the desired date from which the House Rent
Allowance will come into effect.
12. Select Percentage from the List of Slabs in the Slab Type field.
13. Specify the required percentage for the Pay Head calculation in the Value Basis field.

Continued ……