Employee Benefits in HRMS #

Flexible benefit plans allow employees to avail the benefits they want or need from a package of programs offered by an employer. They may include health insurance, pension plans, telephone expenses, etc.

To set Flexible Benefits in Emeron HR, follow the following steps:

Types of Benefits #

Once Is Flexible Benefit is enabled for a salary component, user can choose how to pay it out based on following scenarios:

1. Accrue and payout at end of payroll period
   • The benefit amount accrues each payroll cycle and is fully paid out in the final cycle.
2. Accrue per cycle, pay only on claim
   • The benefit accrues each cycle but is paid only when the employee submits an Employee Benefit Claim.
   • Payout is processed via Additional Salary.
   • Optional: Any unclaimed accrued balance can be auto-paid in the final cycle by enabling Payout Unclaimed Amount in Final Payroll Cycle.
3. Allow claim up to the full period limit
   • The employee can claim the entire annual benefit in one go. No accruals are created.

Note: If Depends on Payment Days is enabled for a component, the monthly entitlement will be adjusted accordingly.

Assigning Employee Benefits to Employees #

• Configure employee benefits and their yearly amount in the Salary Structure. This acts as the template for employee benefits.
• When a Salary Structure is assigned to an employee, these details are copied into the Salary Structure Assignment and can be edited further if required.
• The final list and amounts in the Salary Structure Assignment are what the system considers.

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Employee Benefit Application #

• Employees can opt for the benefits they want from those assigned in their Salary Structure Assignment.
• If no Benefit Application exists, the system falls back to the Salary Structure Assignment.
• To make a Benefit Application mandatory, enable Mandatory Benefit Application in Payroll Settings.

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Employee Benefit Ledger #

• In the Salary Slip:
  • Accrued Benefits appear in the Accrued Benefits table.
  • Payouts appear as Earnings.
  • 
• After salary is processed, a Benefit Ledger Entry is created for every accrual and payout to keep track of balances.

Employee Benefit ClaimClaims can be submitted only for these payout types: #

• Accrue per cycle, pay only on claim
  • Claim limit = Total accrued so far + Current month’s entitlement
• Allow claim up to the full period limit
  • Claim limit = Total assigned amount

Accrual Component in Salary Component #

A new checkbox Accrual Component is available in the Salary Component doctype.

Example use case:

• HR wants to record a Loyalty Bonus equal to 5% of basic salary every month and pay it out after 10 months.
• Create a Salary Component Loyalty Bonus, enable Accrual Component, and add it to the Salary Structure with a formula.
• This accrual will:
  • Show in the salary slip as Accrued Earnings.
  • Not be included in gross pay or accounting entries.
  • Create an Employee Benefit Ledger entry for tracking.
• At the end of 10 months, the employer can create an Additional Salary for the accrued amount, which will then flow into gross pay, accounting, and tax calculations.

Accrued Earnings Report #

A report to track total accruals and payouts.

• For standard accruals, users can create an Additional Salary for pending payouts directly.
• For flexible benefits, payouts must be done via an Employee Benefit Claim.