Salary calculation

Salaries -> Salaries -> New salary

When adding salaries, there are two options – for each employee individually or for multiple employees at once. To add individually, click on the “New Salary” button, and for calculating for multiple employees at once, click on “New salaries for many“. In the latter case, make sure to set up the salary and applicable taxes on the employee’s card beforehand.

The calculation method for salaries is the same for all types of salary components. However, the tax obligations may vary depending on the type, and these need to be specified on the employee’s card.

In this guide, we will cover adding a new salary individually. In the view for adding a new salary, there are five panels:

  • General information
  • Salary parts
  • Withholdings
  • Taxes
  • Holidays information and aggregated payroll

1. General information

  1. First, select the employee’s name.
  2. In the description field, enter the name of the month for which the salary is being calculated.
  3. The system generates a cost entry based on the calculation date. If the remuneration is calculated for the entire month, the calculation date is always the last day of the month.
  4. Payout date – the payday agreed upon within the company as specified in the settings.
  5. The system fills this field automatically based on the salary lines.
  6. Start and end of the payroll period. When the period is changed, salary details from the employee card and calendar events (vacation, sick leave, etc.) are reloaded.
  7. The period shortcuts include “Current month” and “Previous month”. Using these shortcuts automatically updates the description (2), calculation date (3), payout date (4) and salary period (6).

2. Salary parts

Once the general information is set, you can modify or add salary parts if needed, such as additional bonuses. To add a new salary part, click “Add New Line” and choose the appropriate salary type from the dropdown menu.

AdviceIf holiday days are not marked in the calendar and you add a holiday payment row directly to the salary, the holiday payment amount will not be calculated automatically. Additionally, it will not be correctly reflected in the holiday days report.

In the Salary Parts panel, the salary amount is displayed according to the data set on the employee’s card (monthly salary, hourly wage).
If the employee’s card specifies an hourly wage calculation, the default display will show the number of standard working hours for the month (assuming no absences in the calendar). If the employee works part-time or according to a schedule, you may need to adjust the number of hours worked. Separate work schedules cannot be created in SimplBooks.

3. Withholdings

Here, the withholdings from the employee’s net salary are reflected (example bailiff’s claims). By default, the financial account is set to 2613 Withholdings from net salary. Such a claim must be marked as paid when fulfilling the obligation as a financial transaction.

The default withholdings account can be changed in “Settings -> Automatic transactions -> Salaries -> Withholdings from salary.”

4. Taxes

Taxes applicable to the salary can be selected or adjusted in the “Withholdings and employer’s contributions” panel by checking the box in front of the tax name. If taxfree part is applied when calculating income tax on the employee’s salary, it must be indicated in the “Taxfree part” field on the income tax line.

Tip To avoid errors, it is recommended to set applicable taxes and the taxfree amount on the employee’s card.

5. Holidays information and aggregated payroll

The Holidays information panel displays the number of accumulated vacation days at the start of the calculation period and the 6 month average daily rate. The info button next to the average daily rate shows the data used for the calculation.

The 6 month average daily rate will not be displayed if no salary has been entered for the employee in the 6 months prior to the selected period.

The aggregated payroll table shows the employer’s total cost, total tax amounts and the net and gross salary.

If all information have been checked, save the salary.

For any additional questions, please write to us at support@simplbooks.ee.

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