Correct way to set up Salary structure/component

1

In Nepal, the Labor law mandates employees be paid for 13 months in a year.
The additional 1 month salary is paid on Festival season usually Sept/Oct every year.
If employee joining period is less than 1 year at that Festival time, they get paid on pro rata basis.

For ease of calculation, lets assume only basic salary.

Assume BS = 50,000 / month
Gross annual income = 50000*13 = 6,50,000

How should we set up salary component and salary structure to correctly handle this payout ? Is Additional salary the best way ?

2

Yes, Additional Salary is the best option to pay the bonus. It allows you to add one-time payments like the 13th-month salary. The Recurring option is also available if you need to pay the bonus on a fixed interval, repeating every month within a set date range.
https://docs.frappe.io/hr/additional-salary

3

This would mean, for a new joinee, lets say 3 months before bonus date, they will receive 25% of the basic salary. We would have to make an additional salary at joining time.

Also, we would have to make new additional salary entry for all staffs manually, calculate salary amount manually and repeat that process every year.

Are you sure, this is the best method ?

4

You can use the recurring feature of additional salary, but it will be repeated every month as mentioned in the documentation. If you want to automate this process, you will have to write scripts.
https://docs.frappe.io/hr/additional-salary#3-1-recurring-additional-salary

5

Yes, repetition will be monthly, which is not desired.

May be we should look towards some script.

Thanks anyway.!

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