Setting up Payroll in Tally Prime is essential for businesses to manage employee salaries, wages, bonuses, and deductions efficiently. Tally Prime offers comprehensive payroll management features that allow you to automate payroll processing, maintain employee records, and generate statutory reports. Here's a step-by-step guide to setting up payroll in Tally Prime. Tally Prime provides various tools that allow you to implement and process payroll. The Payroll Info. menu allows you to construct various payroll masters required to compute employee earnings and deductions.
Step 1: Enable Payroll Feature in Tally Prime
Before you start setting up payroll, you need to enable the payroll feature in Tally Prime.
Login to Gateway of Tally > F11: Features > F1: Accounting Features.
Under 'Maintain Payroll', select 'Yes'.
Press 'Enter' to save the changes.
Step 2: Create Payroll Masters
Once the payroll feature is enabled, you need to create payroll masters, which include Employee Groups, Employee Masters, Pay Heads, and Salary Details.
2.1. Create Employee Groups
Employee Groups help in categorizing employees based on departments, roles, or any other criteria.
Login to Gateway of Tally > Masters > Payroll Masters > Employee Groups > Create.
Enter the Group Name, for example, 'Sales', 'HR', etc.
Define the Under Group. If it’s the primary group, select 'Primary'.
Press 'Enter' to save.
2.2. Create Employee Masters
Employee Masters store individual employee details.
Go to Employees > Create under Masters > Payroll Masters > Employees > Gateway of Tally.
Enter the Employee Name, Employee Code, and select the Employee Group.
Provide additional details like Date of Birth, Gender, and Date of Joining.
Specify Statutory details if required (e.g., PF Account No., PAN, etc.).
Press 'Enter' to save the employee details.
2.3. Create Pay Heads
Pay Heads define the various components of an employee’s salary, such as Basic Salary, HRA, Provident Fund, etc.
Go to Masters > Payroll Masters > Pay Heads > Create in the Gateway of Tally.
Enter the Pay Head Name (e.g., Basic Salary, HRA, etc.).
Specify whether it’s an 'Earnings for Employees' or a 'Deductions from Employees'.
Define the Calculation Type (e.g., As Computed Value, On Attendance, etc.).
Specify the Calculation Period (Monthly, Weekly, etc.) and Rounding method if needed.
For statutory pay heads like PF, ESI, etc., provide the relevant statutory details.
Press 'Enter' to save the Pay Head.
Step 3: Define Salary Details
Now that you have created the Payroll Masters, you need to define salary details for each employee.
Login to Gateway of Tally > Masters > Payroll Masters > Salary Details > Create.
Select the Employee Name.
Define the Effective Date for the salary structure.
Add the Pay Heads (e.g., Basic Salary, HRA, etc.) and specify the amounts or percentage values.
If there are deductions, specify the deduction amounts.
Press 'Enter' to save the salary structure.
Step 4: Process Payroll
After setting up the payroll masters and salary details, you can process the payroll for employees.
Login to Gateway of Tally > Transactions > Payroll Vouchers > F2: Date.
Select the Voucher Date.
In the Payroll Voucher screen, select 'Payroll Auto Fill' from the right-hand side options.
Choose the Payroll Auto Fill option based on your requirement (e.g., Salary Auto Fill).
Select the Employee Category and other criteria like the month for which payroll is to be processed.
The system will automatically fill in the salary details based on the predefined salary structures.
Review the payroll details, and press 'Enter' to accept.
Save the Payroll Voucher.
Step 5: Generate Payroll Reports
Tally Prime allows you to generate various payroll-related reports, such as Pay Slips, Salary Statements, and Statutory Reports.
Go to Display > Payroll Reports in the Tally Gateway.
Select the report you want to view, such as Pay Slip, Attendance Sheet, or Salary Register.
Specify the period and other criteria.
The report will be generated based on the payroll data processed.
You can print or export the report as required.
Step 6: Statutory Compliance
Tally Prime also helps with handling statutory payroll compliance, such as Provident Fund (PF), Employee State Insurance (ESI), and Professional Tax (PT). Ensure that all statutory Pay Heads are correctly configured, and the relevant details are entered in the employee masters.
To generate statutory reports, go to Gateway of Tally > Display > Payroll Reports > Statutory Reports.
Select the appropriate report like PF Contribution, ESI Contribution, etc.
Ensure that all statutory deductions and contributions are accurate and up-to-date.
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1. Which option do you need to enable to activate the payroll feature in Tally Prime?
A. F2: Features
B. F11: Features > F1: Accounting Features
C. F12: Configure
D. F10: Audit Features
Answer: B. F11: Features > F1: Accounting Features
2. In which menu do you create Employee Groups in Tally Prime?
A. Masters > Payroll Masters > Employee Groups
B. Gateway of Tally > Transactions > Employee Groups
C. F11: Features > Employee Groups
D. Payroll Vouchers > Employee Groups
Answer: A. Masters > Payroll Masters > Employee Groups
3. What information is typically stored in Employee Masters in Tally Prime?
A. Employee Salary and Department
B. Employee Name, Code, and Group
C. Employee Code, Department, and Attendance
D. Employee Bank Details and Tax Information
Answer: B. Employee Name, Code, and Group
4. What is the purpose of Pay Heads in payroll setup in Tally Prime?
A. To categorize employees into groups
B. To manage payroll vouchers
C. To define components of salary like Basic Salary, HRA, etc.
D. To process payroll automatically
Answer: C. To define components of salary like Basic Salary, HRA, etc.
5. What type of calculation can be assigned to Pay Heads in Tally Prime?
A. Manual Entry
B. On Attendance or As Computed Value
C. Weekly or Monthly
D. Employee Category
Answer: B. On Attendance or As Computed Value
6. When defining salary details for an employee, what is the first step after selecting the employee name?
A. Enter the employee’s address
B. Add Pay Heads and amounts
C. Define the Effective Date for the salary structure
D. Specify the employee’s PF and ESI details
Answer: C. Define the Effective Date for the salary structure
7. Which option is used to process payroll in Tally Prime after salary structures have been defined?
A. Transactions > Accounting Vouchers
B. Gateway of Tally > Transactions > Payroll Vouchers
C. Masters > Payroll Vouchers
D. Display > Payroll Reports
Answer: B. Gateway of Tally > Transactions > Payroll Vouchers
8. What is the role of the ‘Payroll Auto Fill’ feature in Tally Prime?
A. It categorizes employees based on roles
B. It processes salary automatically for multiple employees
C. It generates payroll reports
D. It helps in managing employee attendance
Answer: B. It processes salary automatically for multiple employees
9. Which report is NOT part of the Payroll Reports in Tally Prime?
A. Pay Slip
B. Salary Register
C. PF Contribution
D. Profit and Loss Statement
Answer: D. Profit and Loss Statement
10. How can you generate statutory payroll reports like PF Contribution and ESI Contribution in Tally Prime?
A. Display > Payroll Reports > Statutory Reports
B. Gateway of Tally > Transactions > Statutory Vouchers
C. F11: Features > Accounting Features > Statutory Reports
D. Masters > Statutory Masters > Payroll Statutory Reports
Answer: A. Display > Payroll Reports > Statutory Reports