Tally Payroll

Tally 9 offers payroll for wages and salary to workers and employees. The payroll is not enabled by default while you create the company. To enable it press F11 to open ‘Accounting Features’ screen.

Tally - Company Alter

Under Cost/Profit Centers Management, you will find Maintain Payroll. Give yes and press ESC to exit.

Now, in Masters Menu there is a new sub-menu 'Payroll Info', and in Transactions Menu ‘Payroll Vouchers’

In the Payroll Info menu there are Sub menus


Pay Heads
Employee Groups
Employees
Salary Details
Units (Work)
Attendance / Production Types
Voucher Types.

You need to create employees for the ‘Salary Details’ menu to be enabled.

Pay Heads

First you need to create the pay heads. Pay head creation is essential as it is used in payroll ledger and Payroll voucher entry. Creation of pay head is done by clicking Pay Heads and clicking Create. Give a name for pay head for example, ‘Production Wages’

In the Pay Heads Type below select appropriate Type. The following are available

Deductions from Employees (For deductions create this pay head)
Earnings for Employees (For wages / salary create this pay head)
Employees' Statutory Deductions (For ESI and other create this)
Employer's Statutory Contributions
Gratuity
Loans and Advances (For Advance and Loan payments create this)
Reimbursements to Employees


It is obvious that for different payments create different pay heads. For deductions from advance create ‘Advance Deductions’ under type Deductions from Employees, and for Production Wages select type ‘Earnings fro Employees’.

Calculation Type

There are four calculation Types:

As Computed Value
As User Defined Value
Flat Rate
On Attendance
On Production


I don’t want to complicate with all these types. For now we will see how to create employees and enter their attendance / production details and take payroll.

n Tally Payroll Tutorial - Part I we see the masters vouchers for payroll. Now we will see how to create them with a case study example:

Consider a manufacturing company the produces cloths (for example, powerlooms producing Gad cloths).

There are two kinds of employee on the company’s payroll

1. PCS Rate wages (based on the production done)
2. Daily wages (Fixed flat rate)

For example the following two employees works on PCS Rate

1. Sundar - Rs. 2.50 per Unit
2. Ponnusamy - Rs. 2.75 per Unit

The following two are paid daily

1. Karthi – Rs. 150 per day
2. Suresh – Rs. 175 per day

Now you have to create payroll for them using Tally. How can you do? It is very easy. Here are the steps you need to follow:

Firs you need to create pay heads in Payroll master.

We need two pay heads:

1. Wages Daily (For Daily Flat wage employees)
2. Wages PCS Rate (For PCS Rate employees)

Before creating Pay Head you need to create Attendance / Production Types
Before creating production Types you need to create work unit

Go to -> Units (Work)
Select Create
Give Symbol: Mtr (for cloths manufacturing, it depends on company)
Format Name: Meter
Number of Decimal places: 1
Give Y to Save
This is used to pay head for production based pay

Tally Payroll - Units

Tally Payroll - Units

Similarly create another unit with Days as symbol name

Now select 'Attendance / Production Type' under Payroll Info
Select Create

Name: Cloths produced
Under: Primary
Attendance Type: Production
Unit: Mtr

Tally payroll - Production Type

Tally payroll - Attendance Type

Similarly Create another with

Name: Attendance
Under: Primary
Attendance Type: Attendance / Leave with pay
Period Type: Days

Now go to pay heads


Select Create

Name: Wages by Attendance
Page Head type: Earnings for Employees
Under: Direct Expenses
Appears in pay slip: Yes
Calculation Type: On Attendance
Attendance / Leave with pay: Select ‘Attendance’ (We just created before)
Calculation Period: Days

Pay Head Wages Pcs Rate

Pay Head Wages by Attendance

We just created one pay head. Create another

Name: Wages by PCS Rate
Page Head type: Earnings for Employees
Under: Direct Expenses
Appears in pay slip: Yes
Calculation Type: On Production
Attendance / Leave with pay: Select ‘Cloth Produced’ (We just created before)

Now you create employees and Employee Groups

Create two employee Groups
1. Daily Wages Employees
2. PCS rate Employees

Create employees:

Karthi and Suresh in ‘Daily Wages Employee’ Group
Ponnusamy and Sundar in ‘Pcs Rate Employee’ Group

Now go to ‘Salary Details’ under Payroll Info

Select Create
Under Employee / Group select ‘Sundar’
Under pay head select ‘Wages by Pcs Rate’ and under rate give 2.50, under per give mtr

Accept and give yes

Similarly for ponnusamy give 2.75

Tally Paroll Salary Details

Now select karthi and select ‘Wages by attendance’ for pay head and give 150 per day
Similarly for suresh give 175 per day

Tally Paroll Salary Details

Great! You are finished with masters. Lets go to Transactions in

Payroll masters, how to create pay heads, Employees, Salary Details, Units, Attendance / Production Types. Now it is time to generate your first payroll. We will continue the case study

Given are the attendance / production details for the 4 employees for two different dates.

Date : 20-aug-2009

1. Sundar - 50 mtr production
2. Ponnusamy - 75 mtr production
3. Karthi – .5 days
4. Suresh – 1.0 days

Date : 21-aug-2009

1. Sundar - 65 mtr production
2. Ponnusamy - 60 mtr production
3. Karthi – 1.0 days
4. Suresh – 1.0 days

Got Payroll vouchers

Select Attendance button

Press F2 to change current Date to 20-aug-2009

Select Attendance Auto fill (CTRL + A)

Select ‘Pcs Rate Employee’ Group
Select ‘Cloth Produced’ Production Type
For Ponnnusamy Give 75 mtr and for sundar give 50 mtr and accept to save.

Attendance Voucher

Again select Attendance Auto fill
Select ‘Daily Wage employee’ Group
Select ‘Attendance’ as type
For Karthi give 0.5 days and Suresh Give 1 day and accept to save

Attendance Voucher

Similarly change date to 21-aug-2009 and give above values for that date

Now you have created 4 Attendance vouchers.

Now click Payroll button (CTRL + F4)

Click Payroll Auto fill (ALT + A)

From: 20-08-09
To: 21-08-09
Employee / Group: All Items
Pay Ledger: Cash (You can create Bank Ledger and select it)
Enter

Payroll voucher creation

Voila! Payroll is generated for all employees.
Accept and Save

Take a cup of coffee and relax!

We have learnt to create Basic Payroll. You can create any number of employees, Group them under any department / function like Accounts, Sales, Marketing, Security, Logistics, Stores anything you like. There are advanced concepts in Tally payroll like Gratuity, Advance, Bonus, and Reimbursement. First master the basic concepts of Tally 9 payroll and come to advanced topics. If you want to print payroll

explained how to generate payroll with attendance and production entries. Now you will see how to print pay slip for individual employee or group of employees.

To print pay slips go to Multi Account Printing -> Multi Payslip printing.

Multi Account Printing Menu

Select No for the ‘Yes’ or ‘No’ prompt.

payslip printing

You can give from, to dates, which employee or group of employees to be printed and other options. Ok. This is the last part of Tally Payroll Tutorial. I have covered the basics. I will give advanced payroll management and Video Tutorial in future. So keep Visiting. :)