We highly recommend that you not set up custom salary structures. Reasons for this -
Most organizations try to do this to reduce tax liability of their employees. XPayroll by default creates a salary structure that is automatically optimised for this.
Previously applicable allowances like conveyance and medical allowances are no longer relevant and do not offer any tax advantages.
If PF and/or ESI is applicable to an employee, then you must enter the exact amount required. If you do not do this, then errors will occur in salary structuring when it is pro-rated (month of joining/exiting the organization).
The only situation where custom salary structures are recommended is if you are offering flexi-benefits to your employees.
Setting up a custom salary structure at an organization level
You have the option of changing the default salary structure that XPayroll assigns to your employees. To do this, head to Settings > Payroll Setup > Default Salary Structure, and click on 'edit'. Here, you can uncheck the option to 'Use XPayroll's default salary structure', and define your own salary structure. This structure will automatically get assigned to your current and new employees, if they aren't using a custom salary structure as defined below.
Setting up a custom salary structure at an employee level
Once you have onboarded an employee, their name will be visible to you under the ‘People’ tab.
To set a salary structure for an employee, click on their name. To edit the salary structure, click on ‘Edit’ under Compensation & Perquisites.
Once you click on edit, you can review the figures and change employees’ annual salary, any advance salary due, perquisites, etc.
If you wish to customise the salary structure for some of your employees, select the checkbox next to 'create a custom salary structure', and then put in the various amounts under different heads. The last column (taxable) can be set as yes/no/flexi. "Flexi" stands for flexible benefit, and this implies that the allowance is taxable by default, but the employee can upload proof of expenses to make it partially/fully tax-exempt as well.