Statutory Setup

 
Welcome to AlignBooks. We are happy to have you on board. In this help studio tutorial, we will explore the HR Payroll – Statutory setup options.
 
Under Statutory Setup you can define and set your preferences and requirements related to the Statutory Components applicable which need to follow for your company.
 
Here you will have five relevant sections where all the Statutory compliance can be set and their calculation can be defined.
 
 
Now we will explore ESI
 
Statutory Setup
 
If you registered under Employees’ State Insurance Corporation, you can use this feature and details can be captured under head ESI.
 
1

ESIC Applicable

Enable this option 1. ESIC Applicable, if your company is registered under Employees’ State Insurance Corporation.
2

Calculation for ESIC

Here Specify the Alias of Components which will be considered for computing Gross Amount of Employee Salary. For Example: Salary Components (Alias) enabled by your company are: 
1) Basic (B)
2) HRA (H)
3) Conveyance (C)
4) Special Allowance (S)
5) Mobile Phone Deduction (M)  (Deduction Type)
Then calculation for the ESI will be B + H + C + S + M
The Deduction type component will also be added as the system take the deduction as Negative so the Amount will automatically get reduced for Total Salary.
3

Round off Option

Select the relevant option from drop down list if you want to round off the ESI amount to be actual, Lower , Upper or None.
  • Actual : Making the Amount equal to the integer that is closest to the Amount.
  • Lower : Making the Amount equal to the next smaller integer that is larger than the Amount.
  • Upper : Making the Amount equal to the next largest integer that is smaller than the Amount.
  • None : No change in Amount.
 
Some Components are predefined by Alignbooks as to maintain the Statutory Implications: 
 
4

Maximum Amount

As per the Norms of ESIC, the Maximum Amount for employee applicable for ESIC.
5

ESIC Rate of Contribution (Employer)

As per the Norms of ESIC, Current percentage of Employer Share to Contribution to ESIC.
6

ESIC Rate of Contribution (Employee)

As per the Norms of ESIC, Current percentage of Employee’s Share to Contribution to ESIC.
 
We have completed setting Employee State Insurance setup. If you want, you can hide this option by clicking on .
 
 
Now we will explore Provident Fund.
If you registered under Employees' Provident Fund Organization, you can use this feature.
 
7

Provident Fund Applicable

Enable this option7. Provident Fund Applicable if your company is registered under Employees' Provident Fund Organization.
8

Calculation for Provident Fund

Here Specify the Alias of Components which will be considered for computing Basic Amount of Employee Salary.
For Example: Salary Components (Alias) enabled by a company are:  Basic (B), Dearness Allowance (DA)  then calculation for the Provident Fund will be B + DA.
9

Round Off Option

Select the relevant option from drop down list if you want to round off the PF amount to be actual, Lower, Upper or None.
  • Actual : Making the Amount equal to the integer that is closest to the Amount.
  • Lower : Making the Amount equal to the next smaller integer that is larger than the Amount.
  • Upper : Making the Amount equal to the next largest integer that is smaller than the Amount.
  • None : No change in Amount.
 
Some Provident Fund Components are predefined by Alignbooks as to maintain the Statutory Implications:
 
10

Maximum Amount

As per the Norms of EPFO, the Maximum Amount for employee applicable for EPFO.
11

PF Rate of Contribution

As per the Norms of EPFO, Minimum Amount, Current percentage of Employee Share & Employer Share to Contribution to EPFO.
11. PF Rate of Contribution
Ac No 1 PF Contribution Account
Ac No 2 PF Admin Account
Ac No 10 EPS Account
Ac No 21 EDLIS Account
Ac No 22 EDLIS Admin Account
 
We have completed setting Employee Provident Fund setup. If you want, you can hide this option by clicking on .
 
 
 
Now we will explore Labour Welfare Fund.
If your place of organization in state where Labour Welfare fund is applicable, you can use this feature.
 
12

Labour Welfare Fund Applicable

Enable this option 12. Labour Welfare Fund Applicable if your company location state is applicable for Labour Welfare Fund.
 
We have completed setting Labour Welfare Fund. If you want, you can hide this option by clicking on .
 
 
 
Now we will explore Tax Deduction At Source.
If you Deduct the Tax at Source for Employees, you can use this feature.
 
13

Tax Deduction at Source Applicable

Enable this option 13. Tax Deduction at Source Applicable if your company Deduct the Tax on Employee Salary.
14

Round Off Option    

Select the relevant option from drop down list if you want to round off the TDS amount to be actual, Lower, Upper or None.
  • Actual : Making the Amount equal to the integer that is closest to the Amount.
  • Lower : Making the Amount equal to the next smaller integer that is larger than the Amount.
  • Upper : Making the Amount equal to the next largest integer that is smaller than the Amount.
  • None : No change in Amount.
 
We have completed setting Tax Deduction at Source. If you want, you can hide this option by clicking on .
 
 
Now we will explore Professional Tax.
If your place of organization in state where Professional Tax is applicable, you can use this feature.
 
 
15

Professional Tax  Applicable

Enable this option 15. Professional Tax Applicable if your company location state is applicable for Professional Tax.
16

Round Off Option

Select the relevant option from drop down list if you want to round off the TDS amount to be actual, Lower, Upper or None.
  • Actual : Making the Amount equal to the integer that is closest to the Amount.
  • Lower : Making the Amount equal to the next smaller integer that is larger than the Amount.
  • Upper : Making the Amount equal to the next largest integer that is smaller than the Amount.
  • None : No change in Amount.
17

Calculation for Professional Tax

Here Specify the Alias of Components which will be considered for computing Gross Amount of Employee Salary.
For Example: Salary Components (Alias) enabled by a company are: 
1) Basic (B)
2) HRA (H)
3) Conveyance (C)
4) Special Allowance (S)
5) Mobile Phone Deduction (M)  (Deduction Type)
the calculation formula for the Professional Tax will be B + H + C + S + M
The Deduction type component will also be added as the system take the deduction as Negative so the Amount will automatically get reduced for Total Salary.
 
 
Click on   to save the information entered in Statutory setup.
 
 
Now we will look for Overtime Setup. Click on “Overtime” Tab of the panel.