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Salary components describe parts of employee compensation, such as base salary, allowances, deductions, or other payroll-related values.

Where Salary Components Are Used

Salary components help HR and payroll reviewers label compensation items in a consistent way. Use them for repeatable payroll lines such as base salary, housing allowance, transport allowance, commission, bonus, overtime, loan deduction, tax deduction, or reimbursement.

Keep the list short enough for payroll users to choose the right component quickly. If a value is a one-off note rather than a reusable payroll category, do not create a new component for it.

Add A Salary Component

Open Settings.
Go to HRM.
Open Salary Components.
Select the add action.
Enter the component name.
Save it.

Keep component names clear so payroll reviewers can understand what each amount represents.

Decide whether each component is an earning, allowance, deduction, reimbursement, or adjustment before adding it. Clear categories make payroll review and reports easier to interpret.

Before Adding Components

List the payroll lines your company uses regularly. Create components for repeatable lines that HR or finance needs to report on. Do not create a separate component for every one-time correction.

Confirm whether a component increases pay, reduces pay, or records a reimbursement. Payroll reviewers should not have to infer this from a vague name.

Decide Component Behavior

Before saving a component, decide how payroll should treat it:

earnings increase gross pay
allowances add recurring or policy-based pay
deductions reduce net pay
reimbursements repay expenses without changing the salary agreement
adjustments explain one-time corrections

Use the same wording in HRM settings, employee compensation, payroll review, and finance handoff notes. Different names for the same pay item make payroll reports harder to review.

Name Components Clearly

Use names that describe what the line means on payroll review screens.

Good examples:

Base Salary
Housing Allowance
Transport Allowance
Commission
Overtime
Health Insurance Deduction
Tax Deduction

Avoid vague names such as Other, Extra, or Adjustment unless your payroll process has a clear written rule for them.

Edit Or Remove Components

Use edit when a name needs a small correction. Use delete only when the component should no longer be selected for future payroll work.

Before removing a component, check whether it appears in active payroll runs or employee compensation records. Keeping historical payroll labels stable makes review and reporting easier.

If a component was named poorly but already used historically, rename it carefully and document the change before payroll review. Deleting and recreating similar components can split reporting history.

Payroll Change Checklist

Before changing salary components in a live workspace:

confirm no payroll run is in final review
tell payroll reviewers which labels are changing
check employee compensation records that use the component
open a draft payroll run after the change
compare one employee payslip before and after the update

Do not rename components only to make the settings list look cleaner during an active payroll period. Payroll clarity is more important than cosmetic cleanup.

Review In Payroll

After adding or renaming a component, create or open a safe payroll draft and confirm the component appears where payroll users expect it. Check both employee compensation setup and payroll run review if your process uses both.

Do not change component names during final payroll review unless the payroll team knows exactly what changed.

Salary components work alongside other HRM settings:

Departments group employees by team or business unit.
Positions describe job titles or roles.
Leave types define paid and unpaid leave categories.
Salary components define compensation and deduction labels.

Configure Salary Components