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Payroll

This documentation provides a comprehensive guide to the Payroll Software module within the Horilla. The Payroll module is a crucial component of Horilla HR Software, enabling efficient management of employee compensation, tax calculations, and the generation of accurate payslips.

By incorporating the Payroll module into Horilla HRMS, organizations can further enhance their HR management capabilities, streamlining payroll processes and ensuring accurate financial transactions. This documentation will outline the key functionalities of the Payroll Software module, including Contract Management, Federal Tax Configuration, Allowances and Deductions, and Payslip Generation.

Contract Management:

The Contract Management feature allows you to define and manage employment contracts within Horilla HR Software. You can configure contract terms and conditions, track contract start and end dates, and handle contract renewals and terminations seamlessly.

Filing Status Configuration :

The filing status functionality allows users to specify their filing status, such as single, married filing jointly, married filing separately, head of household, or qualifying widow(er), which affects their tax calculations. This critical feature plays a significant role in tax calculations, ensuring that users’ tax liabilities are accurately determined based on their basic pay, gross pay, or taxable pay.

Federal Tax Configuration:

With the Federal Tax Configuration functionality, you can set up and manage federal tax rules and regulations for yearly. This includes configuring tax brackets and rates, managing tax exemptions and allowances, updating tax tables as required, and handling various filing statuses

 

Allowance and Deduction Management:

The Allowance Management feature in Horilla empowers users to define and efficiently manage various types of allowances. This comprehensive feature allows users to effortlessly configure diverse allowance categories, assign them to employees, and easily adjust the amounts as needed. Providing maximum flexibility, users can set up allowances that are either fixed or dynamically calculated based on specific criteria.

 

With the dynamic calculation option, users can specify the method for determining the allowance amount, leveraging various fields such as basic pay, attendance, overtime, and more. This smart functionality enables precise and customized allowance calculations, ensuring that employees receive accurate and fair compensation.

 

Moreover, the system facilitates targeting allowances to specific employees who meet certain conditions. By defining conditions based on key fields, such as children, marital status, experience, gender, country, and state, users can tailor allowances to suit individual circumstances. This personalized approach guarantees a seamless and accurate allowance management experience for all employees.

 

Horilla’s Deduction Management feature empowers users to efficiently manage and customize various types of deductions for employees. This comprehensive tool allows users to define deductions based on specific criteria, such as basic pay, taxable gross pay, or net pay, and easily adjust deduction amounts as needed.

 

With the option to set deductions as fixed amounts or dynamically calculated rates, users can tailor deductions to suit employees. The system’s intelligent functionality enables precise deduction calculations, ensuring accurate payroll processing and fair compensation for each employee.

 

Moreover, the Deduction Management feature offers the ability to target specific employees for deductions based on defined conditions, such as employment status, pay head conditions, or other employee information. This personalized approach streamlines the deduction process and ensures that deductions are applied accurately and transparently.

 

Payroll Processing:

The Payroll Processing feature within the Horilla HRMS manages various aspects of employee compensation and generates accurate payroll information. It performs calculations to determine different components such as taxable gross, gross pay, basic pay, taxable and non-taxable allowances, deductions, pretax deductions, post-tax deductions, taxes, federal taxes, and net pay. The feature also handles additional factors like overtime, bonuses, and commissions, ensuring comprehensive payroll management. Here are the key components managed by the Payroll Processing feature:

 

Taxable Gross:

The Payroll Processing feature calculates the taxable gross for each employee. It considers factors such as regular wages, overtime pay, and any additional taxable income.

 

Gross Pay:

Gross pay represents the total amount earned by an employee before any deductions or taxes are applied. The Payroll Processing feature accurately calculates gross pay based on various components such as regular salary, overtime, bonuses, commissions, and any other applicable earnings.

 

Basic Pay:

Basic pay refers to the fixed salary or hourly rate paid to an employee, excluding additional components like overtime or bonuses. The Payroll Processing feature calculates the basic pay based on the employee’s employment agreement or contract.

 

Taxable and Non-Taxable Allowances:

The Payroll Processing feature accounts for both taxable and non-taxable allowances provided to employees. Taxable allowances are subject to income/federal tax, while non-taxable allowances are exempt from tax obligations. The system accurately calculates and categorizes these allowances for accurate tax calculations.

 

Deductions:

Deductions include various withholdings from an employee’s gross pay. The Payroll Processing feature handles deductions such as retirement contributions, healthcare premiums, loan repayments, and other voluntary or mandatory deductions. It ensures accurate deduction calculations and reflects the appropriate amounts on the employee’s payslip.

 

Pre-tax Deductions:

Pre-tax deductions are deductions made from an employee’s gross pay before calculating income/federal tax. These deductions, such as contributions to retirement plans or certain benefits, help lower an employee’s taxable income. The Payroll Processing feature manages pre-tax deductions and ensures accurate calculations.

 

Post-tax Deductions:

Post-tax deductions are deductions made from an employee’s net pay after income/federal tax calculations. These deductions may include items such as charitable contributions or voluntary deductions. The Payroll Processing feature calculates and applies post-tax deductions accurately.

 

Taxes:

The Payroll Processing feature calculates and withholds applicable income/federal taxes based on the employee’s earnings, tax brackets, and relevant tax regulations. It considers both federal and state tax requirements to ensure accurate tax calculations.

 

Federal Tax:

Federal tax refers to the income/federal tax owed to the federal government. The Payroll Processing feature handles the configuration of federal tax rules, calculates federal tax amounts based on income brackets, exemptions, and allowances, and ensures accurate federal tax deductions.

 

Net Pay:

Net pay represents the amount an employee receives after all deductions and taxes have been applied to the gross pay. The Payroll Processing feature accurately calculates the net pay, considering all deductions, taxes, and additional factors, and reflects it on the employee’s payslip.

 

By effectively managing these components, the Payroll Processing feature ensures accurate and timely payroll calculations, reduces manual effort, and generates detailed payroll reports for record-keeping and financial analysis.

 

Payslip Generation:

With the Payslip Generation functionality in Horilla, you can automatically generate payslips for all employees, containing relevant payroll information such as earnings, deductions, and taxes. While template customization is not currently available, the system provides standardized payslip formats that ensure consistency and accuracy.

 

Payslips are generated based on the payroll data processed by the Payroll module. The system takes into account each employee’s individual compensation components, including basic pay, allowances, overtime, bonuses, and commissions. It also considers deductions such as taxes, pre-tax deductions, post-tax deductions, and any other applicable withholdings.

 

The generated payslips present a breakdown of each employee’s earnings, deductions, and taxes, providing a clear overview of their net pay. 

 

When employees log in to their accounts within the employee self-service portal, they will be able to access the payslip section, where they can view the details of their payslips. However, please note that the current version of Horilla does not include the option to download or print payslips directly from the portal.

 

If employees require a physical or printable copy of their payslips, they can reach out to the HR department or payroll administrators for assistance. The HR department can generate and provide employees with the necessary printed payslip documents through traditional channels, such as handing them out in person or delivering them physically.

 

As an open-source system, Horilla provides the flexibility for users and developers to make necessary changes and enhancements to meet specific requirements. If you have the technical expertise, you can consider customizing the codebase to add the download or printing functionality for payslips within the self-service portal.

 

Being an open-source project, you have the freedom to modify the source code and implement the desired features. This allows you to tailor Horilla to better suit your organization’s needs. However, it’s important to note that modifying the codebase requires technical proficiency and thorough testing to ensure the desired functionality is added accurately and securely.

 

If you decide to make changes to the Horilla codebase, it is recommended to follow best practices, adhere to coding standards, and maintain clear documentation of your modifications. Additionally, consulting with the Horilla support team or engaging with the open-source community can provide valuable guidance and insights during the customization process.

 

Please keep in mind that future updates or new versions of Horilla may include the download or printing functionality for payslips. It is advisable to stay informed about any official updates and compatibility considerations to ensure a smooth transition when upgrading your Horilla installation.

 

While customization of payslip templates is currently not available within Horilla HRMS, the system ensures that the standard payslip format meets industry standards and legal requirements. The standardized format ensures consistency and simplifies the process of generating and distributing payslips to employees.

 

By integrating the Payroll Software module into Horilla, organizations can efficiently manage employee compensation, and taxation, and generate accurate payslips. This documentation will provide you with the necessary information to configure and utilize the Payroll module effectively, ensuring seamless integration with the existing modules within Horilla HRMS.

 

Please refer to the subsequent sections for detailed instructions on each of the mentioned functionalities, enabling you to make the most of the Payroll Software module within Horilla HR Software.