Salary and Accounting issues

Frappe HR
1

Greetings!

We need a way of factoring in Attendance and Appraisal Score in calculation of Payroll since this is a standard practice in most organizations

Also, creating Journal Entry for payroll is usually an Accounting function but it is currently located in the HR module in ERPNext. Could something be done about this as well?

Many thanks!

Wale

2

Based on our understanding these vary based on organization.

For attendance, for example you can track via Leave Without Pay.

It is a part of Process Payroll. Atleast someone from accounting is usually authorized with creating Salary Slips

Please post if you have an suggestions.

3

Hi Rushabh,

Trust you’re doing great. Thanks for your feedback on this. Here are my thoughts:

  1. It would be nice if we have an option to choose whether or not to factor in Attendance and Appraisals in Salary calculations. It is a common practice to factor in these elements especially when dealing with sales people or factory workers. Using LWP will be extremely cumbersome in these scenarios. We could have a simple form of implementation where the HR User can set what percentage of the total salary the score (Attendance and/or Appraisal score) should be applied to. For example:

Total Possible Salary = 1000
Appraisal Score (%) is set to be applied on 50% of Salary
Attendance Score (%) is set to be applied on 100% of Total Possible Salary
Employee Appraisal score is 50%
Employee Attendance score is 80%

Calculation
Attendance is always applied first to Total Possible Salary because it functions similar to LWP. Since, in this case, Attendance score is applied to 100% of Total Possible Salary, it means that there is no Fixed (guaranteed) portion of the salary. Employee had 80% score therefore,
Salary = 80% of (100% of 1000) = 800

Appraisal is then applied next. Since Appraisal score, in this case, is only applied to 50% of Salary, it means the Employee has 400 Fixed and the remaining 400 is Variable (depending on Appraisal score). Employee had 50% score therefore,
Actual Salary Received = 400 (fixed) + 50% of 400 (variable) = 600

Hope you got my explanation

  1. You are right about the overlap between Accounting and HR when it comes to pay slips. I guess we can work with the current implementation by giving someone in Accounts access to the Process Payroll form only. I believe HR Users will be restricted from making Bank Entries since they don’t have permission for JVs, right?

Looking forward to your feedback and any other opinions/contributions on this

Cheers!

Regards,
Olawale

4

@wale

  1. I think its best to customize this logic, unless there are lots of users who want this implemented.

  2. Yeah its best to give a accountant right to make salary slips than the other way round.

1 Like
5

how to make this in erpnext as a salary component based on appraisal