Salary Components

Salary components are the different parts that make up an employee’s total salary. These include earnings and deductions, which determine the gross pay and the final take home salary of your employees.

Earnings

Earnings refer to any type of compensation or income an employee receives during a specific pay period (such as weekly, biweekly, or monthly). These earnings may be taxable or non-taxable based on the earning type and the applicable regulations.

By default, Zoho Spend includes the following earnings types:

• Regular Pay
• Over Time Pay
• Severance Pay
• Double Pay
• Bonus
• Commission
• Leave Encashment

These default earnings are pre-configured and cannot be edited, marked as inactive, or deleted.

In addition to the default earnings, you might need to create custom earnings specific to your organization. For example, if you offer a unique allowance or a performance-based incentive, you can add new earnings to Zoho Spend. Once added, these custom earnings can be assigned to employees, and you can choose to edit, mark as inactive, or delete them as needed.

Add an Earning

Here’s how you can add a new earning:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Click the Add Component dropdown and select Earning.
• Select the Earning Type from the dropdown. You can choose either Other Earnings or Non Taxable Earning.
• Enter the Earning Name. This name must be unique from other earnings.
• Enter the Name in Pay Stub. This is the name which will be displayed on your employees’ pay stubs.
• Mark the Mark this as Active checkbox if you want to make the earning active and use it in upcoming payrolls.
• Click Save.

Once saved, this earning can be used in payrolls, and you can assign it to employees.

Edit an Earning

Here’s how you can edit an earning:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over an earning that is of the type Other Earnings and click the More icon.
• Click Edit.
• Make the necessary changes and click Save.

Mark an Earning as Inactive

When an earning type is no longer relevant but you want to retain its history or reuse it in the future, you can mark it as inactive instead of deleting it. This ensures the earning is no longer available for new payrolls, while still preserving the record.

Here’s how you can mark an earning as inactive:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the earning that is of the type Other Earnings and click the More icon.
• Click Mark as Inactive.

The earning will be marked as inactive, and you will not be able to associate it with any of your employees in future payrolls.

Mark an Inactive Earning as Active

Here’s how you can mark an inactive earning as active:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the inactive earning and click the More icon.
• Click Mark as Active.

The earning will be marked as active, and you can associate it with any of your employees in future payrolls.

Delete an Earning

Here’s how you can delete an earning:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the earning and click the More icon.
• Click Delete.
• Confirm your action by clicking Yes in the pop-up.

Deductions

Deductions refer to amounts subtracted from an employee’s gross salary to arrive at the final take-home pay. These deductions can be for taxes, retirement contributions, garnishments, or other employee-related expenses.

For example, deductions may include voluntary contributions or court-ordered wage garnishments. These deductions must be applied in compliance with local and federal laws.

Add a Deduction

Here’s how you can add a new deduction:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Click the Add Component dropdown and select Deduction.
• Enter the deduction’s name in the Name in Pay Stub field. This is how the deduction will appear on the employee’s pay stub.
• Select the Deduction Type from the dropdown. You can choose either Deduction, Garnishment, or Child Support Garnishment.
  • Deduction: A deduction is any amount withheld from an employee’s pay for general reasons, such as taxes, insurance premiums, loan repayments, or voluntary contributions. These are typically agreed upon or mandatory payroll deductions. For example, Provident fund contributions, professional tax, or health insurance premiums.
  • Garnishment: A garnishment is a court-ordered deduction from an employee’s wages. It requires the employer to withhold a specific amount from the employee’s pay and send it directly to a third party (for example, to settle a debt or unpaid loan). For example, Wage garnishment due to unpaid credit card debt or tax liabilities.
  • Child Support Garnishment: This is a specific type of garnishment ordered by a court or government agency to collect child support payments. The employer deducts the specified amount from the employee’s paycheck and remits it to the designated authority or guardian. For example, A court order requiring part of an employee’s salary to be paid as child support.
• Select the Deduction Frequency by marking the checkbox. You can either choose One-time deduction or a Recurring deduction.
• Mark the Mark this as Active checkbox if you want to make the deduction active and use it in upcoming payrolls.
• Click Save.

The deduction will be created, and you can assign it to employees as needed.

Edit a Deduction

Here’s how you can edit a deduction:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the deduction and click the More icon.
• Click Edit.
• Make the necessary changes and click Save.

Mark a Deduction as Inactive

When a deduction is no longer relevant but you want to retain its history or reuse it in the future, you can mark it as inactive instead of deleting it. This allows you to keep the deduction’s records while preventing its use in future payrolls.

Here’s how you can mark a deduction as inactive:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the deduction and click the More icon.
• Click Mark as Inactive.

The deduction will be marked as inactive, and you will not be able to associate it with any of your employees in future payrolls.

Mark an Inactive Deduction as Active

Here’s how you can mark an inactive deduction as active:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the inactive deduction and click the More icon.
• Click Mark as Active.

The deduction will be marked as active, and you can associate it with any of your employees in future payrolls.

Delete a Deduction

Here’s how you can delete a deduction:

• Go to Settings on the left sidebar.
  (OR)
  Click Settings in the top right corner of the page.
• Click Salary Components under Setup & Configurations.
• Hover over the deduction and click the More icon.
• Click Delete.
• Confirm your action by clicking Yes in the pop-up.

The deduction will be deleted.