In ERPNext, Salary Components are the items that factor in with the total salary of the employee. These are the possible income and deductions that may be applicable in an employee. These components will be assigned to a Salary Structure, then that structure will be assigned per employee depending on what is applicable to them.
To create Salary Components:
Some of the additional attributes of the Salary Component that can be enabled using checkboxes are as follows:
5. Go to Condition and Formula section. On the Amount Field, enter how much will be the deduction or earning for this salary component. This is if the amount is fixed for all. In case amount is based on condition or formula, tick the Amount based on Formula box.
6. On the account section, select the account where the salary component will be logged.
7. Click Save to create the Salary Component.
The computation of a Salary Component may also be based on formula. This feature must be enabled and set up first before assigning the salary component in the salary structure.
To enable this feature:
5. Click Save to Apply the changes. This computation will take in effect once Payroll has been processed.
Note: If a Salary Component is pre-defined and not based on condition and formula, simply disable the “Amount based on formula” checkbox. Instead, you may directly enter the amount on the Amount field.