Pay components and payroll setup

Before you can run payroll for a company you need three things: the company's currency, a catalog of pay components (the earnings and deductions a payslip can contain) and at least one salary structure built from them. This article covers the first two. Everything is per company, so a group with two legal entities sets up each one separately.

Who can do this: Admins with `payroll.manage.any`, HR Managers with `payroll.manage.assigned_companies` for their companies. `payroll.view.*` lets you see the catalog without editing it.

Where to find it

Sidebar Administration → Settings → Payroll → Pay components, URL path `/settings/payroll/components`. The company currency is under Administration → Settings → Companies. This module must be enabled on your plan; Admins can check Settings → Billing.

Step 1: currency

In Settings → Companies, edit the company and set its three-letter currency code (INR by default). Every payslip, register and payroll screen for that company is formatted in it. There is no conversion between currencies.

Step 2: creating a pay component

1. Pick the Company from the dropdown at the top of the page.
2. Click New component.
3. Name: required, up to 120 characters, as it will print on payslips (for example "House Rent Allowance").
4. Code: required, up to 16 characters, automatically upper-cased, unique within the company (for example HRA). The code is the column heading in the register CSV, so keep it short and stable.
5. Type: Earning or Deduction. Switching type resets the prorated flag to its default.
6. Sort order: a whole number from 0; lower numbers appear first within their type on structures and payslips.
7. Basic-pay component (percent-of-basic lines resolve against it): tick on exactly one earning per company, normally Basic. Structure lines of type "% of basic" are calculated from the line that uses this component.
8. Prorated by paid days: ticked by default for earnings, unticked for deductions. A prorated component shrinks when an employee has LOP days (paid days divided by calendar days). Leave it off for fixed deductions such as professional tax.
9. Active: untick to hide the component from new structure lines while keeping history intact.
10. Click Save.

Statutory components are manual

ZekoHR does not calculate PF, ESI, professional tax or TDS. Create each one as a Deduction component (for example PF, ESI, PT, TDS) and give it a value in the salary structure, or set the amount per payslip with a line override during review. Keep them non-prorated unless your policy scales them with LOP. The employee's PAN, UAN and ESIC number are stored on their payroll profile for your reference only.

A typical Indian catalog

Editing and deleting

• Edit opens the same dialog. You cannot change the Type of a component that is already used by a structure or a payslip; the save is refused.
• Delete removes a component that nothing references. If it is referenced, the request is refused with "Deactivate it instead" and, for Admins (or anyone with `roles.manage`), an override prompt. Confirming the override does not delete; it marks the component inactive so existing structures and payslip history stay intact.

What happens next

• Creating, updating, deleting and force-deactivating each write an audit log entry.
• New companies created from the setup wizard receive an India baseline catalog automatically; you only need to adjust it.
• Payslip lines store a snapshot of the component name, code and type at the time of calculation, so renaming a component later never rewrites old payslips.

Rules and limits

• Codes are unique per company, not per organisation; two companies can both have HRA.
• Only active components are offered when building structure lines; existing lines on inactive components keep working.
• HR Managers see and edit only companies in their HR scope.
• There is no bulk import of components.

Troubleshooting

The page says No companies yet. Create a company under Settings → Companies first.

I cannot change a component from Earning to Deduction. It is already used. Create a new component with the right type and deactivate the old one.

% of basic lines are refused when I build a structure. No line in that structure uses a component flagged Basic with a flat or % of gross value. Tick the Basic flag on your Basic component.

Delete asks me to confirm a consequence. The component is in use. Confirming deactivates it instead of deleting.

Related

• Salary structures
• Assigning salaries
• Running monthly payroll
• Companies, departments and designations
• Setup wizard