Payroll Overview

Smooth HR Payroll covers the full compensation lifecycle: defining how employees are paid, assigning salary structures, running periodic payroll, generating salary slips, and posting accounting entries. Whether you pay monthly salaried staff, hourly workers, or a mix, the Payroll module connects salary components, tax deductions, leave and attendance data, and optional benefits into a single, auditable workflow.

Help URL: smoothhiring.com/help/hrms/payroll/overview

Table of Contents

1. What Payroll does
2. The payroll lifecycle
3. Navigating the Payroll module
4. Phase 1: Foundation setup
5. Phase 2: Employee compensation
6. Phase 3: Pre-payroll validation
7. Phase 4: Payroll run
8. Phase 5: Post-payroll & accounting
9. Key records at a glance
10. Reports & reconciliation
11. Roles & permissions
12. Tips for smooth payroll
13. Troubleshooting
14. Related guides

What Payroll does

Payroll in Smooth HR is built on Frappe HRMS patterns but branded for your Smooth HR desk. Open the Payroll workspace from the app switcher or sidebar to access transactions, setup masters, and reports.

The payroll lifecycle

Payroll is not a single button — it is a repeatable cycle each pay period:

Setup masters → Assign structures → Validate inputs → Run Payroll Entry → Submit slips → Pay & reconcile

Monthly rhythm (typical):

1. Start of month / period: Confirm attendance is marked, leave applications approved, and any Additional Salary records entered.
2. Mid-month (if applicable): Employees submit tax exemption declarations; HR reviews benefit applications.
3. End of period: HR runs Payroll Entry, reviews draft salary slips, submits them.
4. After submission: Finance uses Salary Register and bank remittance reports; accounting entries post automatically when configured.
5. Year-end: Reconcile tax deductions, process encashments, and prepare compliance reports.

Understanding this sequence helps you diagnose issues — a missing salary slip is usually traced back to structure assignment, payment days, or payroll period configuration.

Navigating the Payroll module

Open Payroll from the Smooth HR sidebar. The module sidebar includes:

Reports (under Payroll sidebar → Reports):

For tax declarations and benefits, see the separate Tax & Benefits overview.

Phase 1: Foundation setup

Before anyone receives a salary slip, configure these masters once (or at fiscal year start):

Payroll Settings

Open Payroll Settings at /app/payroll-settings. Key options:

Salary Components

Each earning or deduction is a Salary Component (/app/salary-component):

Mark components as Tax Applicable, Variable Based On Taxable Salary, or link to Accounts for journal entries.

Payroll Period

Define fiscal payroll windows at /app/payroll-period. Payroll Entry validates that the selected dates fall within an active period.

Income Tax Slab

Configure progressive tax brackets at /app/income-tax-slab (also accessible from Tax & Benefits setup). Slabs drive TDS calculation on salary slips.

Phase 2: Employee compensation

Each active employee needs a Salary Structure Assignment linking them to a Salary Structure:

1. Create Salary Structure — template with rows for each component and amounts or formulas.
2. Create Salary Structure Assignment — attach structure to employee with From Date (and optional To Date).
3. For bulk onboarding, use Bulk Salary Structure Assignment at /app/bulk-salary-structure-assignment.

Important: An employee without a valid assignment on the payroll date will be skipped or error during Payroll Entry.

See detailed guides: Salary Structure and Salary Structure Assignment.

Phase 3: Pre-payroll validation

Before running payroll, verify:

Payment days — the number of days used to prorate salary — depend on Payroll Settings (attendance-based or leave-based) and the employee's shift/attendance records.

Phase 4: Payroll run

Payroll Entry (/app/payroll-entry) is the bulk processing document:

1. New Payroll Entry → select Company, Payroll Frequency (Monthly, etc.), Start Date, End Date.
2. Click Get Employees — Smooth HR loads eligible employees with valid structure assignments.
3. Review the employee table; remove anyone who should not be paid this cycle.
4. Click Create Salary Slips — draft slips are generated.
5. Review individual slips; fix data at source (attendance, structure) if amounts look wrong.
6. Submit Payroll Entry — linked salary slips move to Submitted state.

See Payroll Entry guide for field-level detail.

Phase 5: Post-payroll & accounting

After submission:

Salary Withholding lets you hold part or all of an employee's pay across periods — useful for pending clearances or agreed deferrals.

Key records at a glance

Reports & reconciliation

Roles & permissions

Assign roles on the User record. Restrict Submit on Payroll Entry and Salary Slip to managers if your policy requires dual control.

Tips for smooth payroll

• Run a test payroll in a staging site or with one employee before month-end close.
• Lock attendance before payroll — use HR Settings to prevent backdated changes after a cutoff.
• Standardize salary structures by grade or designation to reduce one-off assignments.
• Document formulas in Salary Structure row descriptions so future admins understand calculations.
• Reconcile payment days — if net pay looks low, check attendance, leave without pay, and joining/relieving dates.
• Keep tax declarations updated before the first payroll of the fiscal year to avoid TDS shocks.

Troubleshooting

Related guides

• Payroll Entry
• Salary Structure
• Salary Slip
• Tax & Benefits overview
• Attendance overview
• Leaves overview

Last updated: May 2026