Salary Component in Frappe HR: Building Blocks of Salary Structures
A Salary Component is a single building block of pay an earning like Basic, HRA, or Conveyance, or a deduction like Provident Fund, Professional Tax, or income tax. Each component defines how that piece of pay behaves, and you assemble components into a Salary Structure to make up a full salary.
You will find it under Home > Human Resources > Payroll > Salary Component.
BEFORE YOU START
Have your Company and its Chart of Accounts ready, since components map to accounts for posting payroll into your books.
How to create a Salary Component
- Open the Salary Component list and click New.
- Enter the Component name and its Abbreviation.
- Set the Type Earning or Deduction.
- Define how its value is found a flat Amount, or Amount based on formula with a formula and optional condition.
- Map the Default Account per Company in the Accounts table.
- Save.
How a component behaves
Several settings control a component’s behaviour, and they’re worth getting right:
- Amount based on formula: calculate the value from a formula (e.g. HRA as a percentage of Basic) rather than a fixed figure.
- Is Tax Applicable: marks an earning as taxable, so it’s included in income-tax calculations.
- Variable Based on Taxable Salary: used for tax-deduction components, where the amount is derived from the employee’s taxable salary.
- Depends on Payment Days: pro-rates the component by the days actually paid in the period (so a mid-month joiner gets a proportionate amount).
- Statistical Component / Do Not Include in Total: for values used only in calculations, not paid out directly.
- Round to the Nearest Integer: rounds the computed amount.
Earnings and deductions
The Type determines which side of the payslip a component lands on. Earnings add to gross pay (Basic, allowances, bonuses), while deductions reduce it (PF, professional tax, income tax). A salary structure is simply the right set of earning and deduction components brought together.
TIP
Set up your components carefully once type, formula, tax flags, and accounts. Every Salary Structure and Salary Slip is built from them, so correct components mean payroll calculates and posts to your accounts correctly without per-payslip fixes.
Related Topics
- Salary Structure
- Salary Structure Assignment
- Salary Slip
- Income Tax Slab
- Payroll Entry
SUMMARY
A Salary Component is a single earning or deduction that makes up pay. Create one with a name, abbreviation, and type (Earning or Deduction), define its value as a flat amount or a formula, and map its default account per company. Behaviour settings tax applicable, variable based on taxable salary, depends on payment days, statistical, and rounding control how it’s calculated and treated. Earnings add to gross pay and deductions reduce it, and components are assembled into Salary Structures.
