Payroll setup: components & salary structures

Do this once per company, in order:

1. Currency; in Settings → Companies, set the company's 3-letter currency code (e.g. INR). Payslips are formatted in this currency; there is no conversion.
2. Pay components (in Settings → Payroll → Pay components, create your building blocks: earnings (Basic, HRA, Special Allowance…) and deductions (PF, Professional Tax, TDS…). Mark exactly one earning as Basic if you want percent-of-basic rules. The prorated flag controls whether a component shrinks with Loss-of-Pay days) usually on for earnings, off for deductions.
3. Salary structures; in Settings → Payroll → Salary structures, combine components into a template. Each line is a rule: a flat monthly amount, a % of basic, a % of gross, or balance (one earning that automatically absorbs whatever is left of the gross). A typical structure: Basic = 50% of gross, HRA = 40% of basic, Special Allowance = balance, plus flat deduction lines.

Statutory amounts (PF, ESI, PT, TDS) are not auto-calculated; set them as flat components and adjust per employee during the monthly review.

Editing a structure that employees are already on asks for confirmation; changes only affect future payroll runs; past payslips never change.