We highly recommend that you not set up custom salary structures. Reasons for this -
- Most organizations try to do this to reduce tax liability of their employees. XPayroll by default creates a salary structure that is automatically optimised for this.
- Previously applicable allowances like conveyance and medical allowances are no longer relevant and do not offer any tax advantages.
- If PF and/or ESI is applicable to an employee, then you must enter the exact amount required. If you do not do this, then errors will occur in salary structuring when it is pro-rated (month of joining/exiting the organization).
The only situation where custom salary structures are recommended is if you are offering flexi-benefits to your employees.