written by Khatabook | July 26, 2021

How to do Payroll Management in Tally ERP 9

Payroll is essentially an aggregation of the total amount of salaries paid to employees by an organisation. It is one of the most significant expenses for organisations, and also one of the most difficult expenses for firms to process. Payroll slips are a time-consuming operation that can be completed frequently, mid, or monthly, depending on the organisation's assets.

How To Deal With Payroll In Tally ERP 9? 

Companies typically outsource payroll services from outside firms, making payroll accounting in tally a simple and straightforward procedure. Payroll service providers handle a variety of activities such as tax obligations, employee time calculation, check preparation and pay report administration. It gradually minimises the business's operating costs.

Has The Processing Of Payroll Services Changed?

The procedure has changed with the introduction of ERP  (Enterprise Resource Planning) systems like Tally ERP 9. Today, the software's 'Payroll Module' is completely linked with the company management system, allowing it to conduct trouble-free payroll processing as well as accounting operations.

The software provides a dependable remote facility, making it possible to access, process and manage payroll data from anywhere and at any time across the world.

There is also no need to hire specialised IT/HR personnel to administer and organise the payroll process in tally. Because with payroll tally ERP 9, the payroll process can be maintained independently and efficiently.

Salient features of Payroll in Tally  ERP 9:

Payroll in tally ERP 9  provides the advantages of easier payroll accounting due to its interaction with accounts.

Tally's Payroll process

  • ERP 9 generates comprehensive reports thanks to user-defined classifications and sub-categories. This could be related to employees, employee groupings, compensation components, departments, among others. 
  • The payroll process module also allows users to set flexible and user-defined criteria.
  • It also allows you to establish user-defined earnings and deductions pay heads.
  • The module allows us to group Payroll Masters in an infinite number of ways.
  • Supports user-defined production units for production/attendance/time-based payment.
  • It provides all-inclusive cost centre reports as well as employee-specific costing data.
  • Using predetermined processes ensures timely and accurate processing of salaries, statutory employee deductions, and statutory employer contributions.
  • It assists in the generation of Statutory forms and challans for EPF and ESI as required.
  • The payroll module also aids in the tracking of employee loan information.

How And Where To Enable The Payroll Function In Tally ERP 9?

Payroll can be enabled in Tally by clicking on "F1" on the ERP 9 from the Cost/Profit Centers Management section. Accounting Features are located in the "F11": Company Features Panel.

To enable Payroll in Tally ERP 9, follow these steps:

1st Step: Navigate to Tally Gateway> F11: Features> F1: Accounting Features.

2nd Step: Scroll down to the section on Cost/Profit Centers Management.

3rd Step: Set the option Keep payroll to Yes.

4th Step: Configure the option- maintain several payroll or cost categories to Yes to allocate employee costs. Separate employee categories must be created in this regard.

5th Step: Enter to accept and save the changes and return to the Gateway of Tally screen.

Also Read: Journal Voucher in Tally - Examples & How to Enter Journal Vouchers 

How Can I Create A Payslip In Tally ERP 9?

In Tally, you can create a payslip in six simple steps:

1st Step: The first step is to create an employee master: G.O.T. (Gateway of Tally)> Payroll Info> Employee Group> Create (Single).

You are required to enter the necessary Employee Details and Employee Group by categorising employees based on their role, such as their department for classification.

2nd Step:  The following stage in this procedure is to generate payroll units.

Path for attendance/creation of production types: G.O.T. (Tally Gateway)> Payroll Information> Attendance/ Production Types> Create.

You need to provide a brief on the Attendance/Production type that will be utilised to record Attendance and Production details.

3rd Step: You will build pay heads for wage components in this stage.

Path for creating pay heads: G.O.T. (Tally Gateway)> Payroll Info> Pay Heads> Create.

Under Pay Head, all components of structured salary are generated. Tally ERP 9's pay head creation is quite user-friendly, as it allows you to create any complex sort of pay head.

4th Step: At this point, you will journalise or record salary information.

Path for creating salary details: G.O.T. (Tally Gateway)> Payroll Info> Salary Detail> Create

In this section, you will enter salary information for both Employee Groups and Individual Employees, including earnings, deductions, and the basis of computation, into the Payroll Tally ERP 9 system.

5th Step: The following steps are required to create a voucher: - G.O.T. (Tally Gateway) --> Payroll Voucher —> To open a payroll voucher, press “Ctrl F5” and then “Ctrl F4”: finally, hit “Alt-A” to auto-populate information.

This is the final stage in the payroll voucher approval procedure. You will be needed to input all Earnings and Deductions in this section.

6th Step: To generate the created payslip.

Path to see payroll report: G.O.T. (Tally Gateway)> Display> Payroll Report> Payroll Statement

Finally, you must generate the Payslip, which will include employee details such as attendance and the Tally ERP 9 system itemising each component of the employee's earnings and deductions and presenting the net amount paid to him for a specific pay period.

How To Create Employee Groups In Tally? 

This tutorial will teach you how to create, modify, and show employee groups in Tally. In Tally, an employee group may be made using either a single or multiple creation approach.

Tally Gateway> Payroll Info> Employee Groups> Single Group> Create is the path to take.

Step 1: On the Gateway of Tally page, select Payroll Info.

Step 2: Under payroll information, select “Employment Creation.”

Step 3: On the next screen, under employee groups, select the option to create a single group.

Step 4: On the employee group creation screen, fill in the following information: 

  • Select the employee category from the drop-down menu 
  • Then enter the name of the employee group. 
  • And select the group as the principal group.

After entering all of the necessary information for personnel group creation, press enter and select Yes to approve the information in Tally ERP 9.

Employee Configuration For Payroll In Tally

1. To alter the default display for the Employee Creation screen, press F12: Configure.

2. Select an option- Provide aliases in addition to your name? Select Yes if the employee has aliases.

3. Select an option- Do you have linguistic aliases for your name? Click on Yes to add the selected aliases in other languages (only while using the Multilingual feature)

4. Select an option- Add a note for the employees? Select Yes if you want to add notes or remarks for an employee.

5. Select an option- Display statutory information? Select Yes to enter the PAN, PF, PR, EPS Account Number, Joining Date, and Relieving Date.

Set the choice. Please include passport and visa information. select Yes to enter the employee's passport and visa information

7. Select an option- Give me the contract details? Select Yes, to add contract information such as Work Permit Number, Contract etc. 

8. Set this option- Show employee display name to Yes. Click Yes when printing reports for printing a different name for an employee. This option is beneficial when several employees share the same name.

9. To accept, press Ctrl-A.

How To Set The Number Of Employees In Tally Payroll?

1. Navigate to Tally Gateway> Payroll Info> Employees> Create (under Multiple Employees)

2. In the Under Employee Group field, select the employee group for which you want to create all of the employees. Select "All Items" in this section if you want to create an independent employee.

3. In the Category field, select the employee category to which you want to add the group. In this box, the default category Primary Cost Category is selected.

4. Fill in the Employee Name field with the employee's name.

5. In the Under field, select the employee group to which you want to add the employee.

6. In the Applicable Tax Regime column, select Regular Tax Regime (old regime) or Tax Regime U/s 115BAC (new regime).

7. Fill in the Income Tax Number (PAN) column with the employee's PAN.

8. Fill in the Date of Joining field with the employees' start date.

The Multi Employee Creation screen displays, as shown below, the details of the employees you added shown.

9. Accept the changes by pressing Ctrl-A.

An additional field on the Multi Employee Alteration page captures the effective date for the tax regime selected.

Also Read: How To File ITR (Income Tax Returns) Online – Income Tax E-filing Guide For FY 2020-21

History of the Tax Regime

With two alternative income tax slabs to choose from, employees can change their tax regime in the middle of a fiscal year. Tally.ERP 9 allows you to select either tax regime at any moment. Every time an employee's tax regime is amended, you need to provide the date of revision. You can also use the Tax Regime History to track all the tax regimes applied to the employee's income.

In the Employee Alteration and Multi Employee Alteration windows in tally ERP 9 payroll, the button L: Tax Regime History is available. Click the button to access the Tax Regime History screen, which contains information about the tax regimes in effect at different times in the past.

Employee Master: In the employee master, you can put all of the details about the employees, such as statutory information, passport and visa information, contact information and additional details. 

Conclusion

Tally ERP9 Payroll is easy to handle and where users can set up and deploy salary structures, align and automate payroll operations, and directly integrate them with mainstream accounting systems.

Tally ERP9 Payroll offers data in the forms specified, such as Payroll Statements, Attendance, Pay Slip. It also offers Overtime Registers, Gratuity, Provident Fund (PF), Employees' State Insurance or ESI. And also, National Pension Scheme or NPS, Professional Tax (PT), Income Tax (IT), Expat Reports among many other features. 

Check out Biz Analyst, a secure mobile application where you can access business data from Tally ERP 9 software anywhere and anytime. Now you can do payroll management with ease. 

Hope you enjoyed reading the blog! 

FAQs

1. Is Inventory supported by Tally as well?

Yes, you can get your stock summary statement in Tally with a single click. It also offers stock queries, movement analysis, cost estimation, stock transfer, stock ageing analysis, physical stock register, and other features.

2. Is the Payroll Module Included in Tally?

Yes, this can be done by Payroll Management where you may manage an employee's salary/other earnings, deductions, attendance, and profile, among other things.

3. Is it possible to create several users in Tally?

Yes. Tally allows you to create many users with varying levels of data access authorization. You can also keep track of the users' activity.

4. Is Tally Data Secure?

Yes, it is completely secure. Tally ERP's usage of data integrity checks assures that no external alteration to your data may have an impact on it. It employs binary coding to prohibit the confidential grouping of information. It also enables you to access your database using a fully functional ODBC layer.

5. Can you keep and generate reports for more than one year's worth of data in Tally ERP without separating the data?

Yes. Tally ERP 9 payroll has the ability to generate immediate reports for any set period (month/year) or at any moment in time, as well as the ability to toggle between Accounting and Inventory reports for the same firm or several companies.

6. How do you switch to the next fiscal year in Tally ERP?

There are two ways to switch to the following fiscal year in Tally ERP:

1- Splitting data: In Tally ERP, you may split the data by carrying all of the closing balances with no errors to the following fiscal year with ease. 

7. Mention the different ledgers that can be created in Tally ERP 9.

Tally ERP 9 allows you to create the following sorts of ledgers:

  • Making a sales and purchase ledger
  • Making an Income and Expense Ledger
  • Putting Together a Party Ledger
  • Making a bank account
  • Putting Together a Tax Ledger
  • Making a current liability

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