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 its 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 MasterInquiry- 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 Salarythis 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 equationfield. This check box is used to activate the equation

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 ElementsGo to Employee masterPayroll 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. AmountAmount 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. PathEmployee masterSelect 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 throughPayrollTransactionEarning (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. Datethis is date in which transaction is being processed. Press button -Transaction Line

Field descriptionEmployeeselect employee from List.

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Earning datethis date comes automatically from Header. AmountAmount 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.
PathPayrollTransactionearning 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 EquationEquation 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- InstallmentAmortization 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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LOAN PRE-PAYMENT
Dynamics provides functionality to set off loan amount (Partially or wholly) manually. Path-> Payroll TransactionLoan 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 paidthis 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
PayrollSet upEarning and DeductionSocial 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 journal. in the Inquiry against particular employee select at employee master. Eventually it can be settled through payment

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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)

PayrollSet upEOSEOS 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 openedField 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 resignationClick 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-TransactionEOSEmployee 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 daysthis 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 PathPayrollPeriodicProvisionPosting leaves Provision

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Field Description (Header) Trans NumberUnique 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 balancelet joining date is 01-06-2010.Employee leave entitlement is 70. Transaction is to be created from 01-07-2010 to 3110-2010(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 01-072010 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 Page 45 of 55 Payroll Management users guide

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 Balance transaction 35.096-29.342=5.753 posted=Total posted-Total amountbalance Total -Total amount balance from from Previous previous transaction I.e. 140.38-117.3667=23.013

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- PayrollSet UpEOSEOS benefits A form gets openedSelect pay code - EOS accrue-- Press the button SetupPeriod 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. Page 48 of 55 Payroll Management users guide

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 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.
IS

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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, Page 54 of 55 Payroll Management users guide

Go to Periodic Payroll Voucher

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