Before you can start using Gadjian’s salary calculation feature, you need to complete the initial payroll setup for your company. You can start this setup by going to Payroll > Settings > Salary & LTHR. Let’s go through the details below:
Which income components exist in your company (besides PPh21 Allowances and BPJS)?
By default, Gadjian provides three income components such as, Basic Salary (Gaji Pokok), Holiday Allowance (Tunjangan Hari Raya / THR) and Overtime Pay (Uang Lembur).
The explanations for these three default components are as follows:
Next, you can add your own income components according to your company’s payroll structure. Gadjian supports several types of income components:
Fixed Amount : This income is always received by eligible employees with the same amount each payroll period. For the example, Position Allowance for certain employees.
Attendance-Based : This income is received by employees only if they work on scheduled workdays. Gadjian will automatically calculate this income if the employee’s attendance data is entered under Attendance > Attendance Management > Attendance Data. For the example, Daily Meal Allowance.
Output-Based : This income is calculated using a rate × unit, similar to attendance-based allowances, but the unit is recorded outside of Gadjian. Concrete example, Production Pay, where x units produced × y rate determines the income.
Manual : This income uses a custom calculation formula that cannot be accommodated by the three methods above. You will need to upload an Excel template containing the manual income components, or enter the manual income directly by editing the employee’s payroll slip during payroll processing.
In addition to setting the name and type of income, you also need to configure whether the income is subject to Income Tax (PPh21) using the “Yes/No” option as shown in the illustration. If you select “Yes”, you also need to choose the A1 type, as follows:
Other Allowances, Overtime, etc : This income will be annualized (multiplied by 12 or prorated according to the employee’s tenure until the end of the current year) when calculating gross PPh21.
Honorarium and Similar Compensation : This income will be treated as non-fixed income for PKWT and PKWTT employees when calculating gross PPh21.
Insurance Premiums Paid by Employer : This income will be annualized (multiplied by 12 or prorated based on tenure) when calculating gross PPh21.
Income in the form of benefit in kind or other which withheld by income tax art. 21 : Non-cash benefits or other benefits provided by the employer that are subject to Article 21 Income Tax withholding. Examples: company car, housing, vouchers, and other non-cash benefits.
Tantiem, Bonus, Gratification, Production Fees, and THR : This income will be treated as non-fixed income for PKWT and PKWTT employees when calculating gross PPh21.
After completing the income components, you also need to determine the deduction components by answering the question What deduction components exist in your company (besides PPh21 deductions, BPJS, and Unpaid Leave)?
The options for deduction components are only three:
Manual Deduction : The deduction amount is entered manually every time payroll is processed.
Fixed Amount Deduction : The deduction amount is set once at the beginning, and it will automatically deduct the same amount from the employee’s salary for each selected payroll period.
Output-Based Deduction : This means the deduction is calculated using a rate × unit. Concrete example, A non-automatic late deduction, where every 5 minutes late = IDR 1,000. If an employee is 50 minutes late, the deduction will be IDR 10,000.
Here, the IDR 1,000 is the rate per 5 minutes, set during the initial payroll data migration. The system will calculate the total lateness in minutes at the end of the month.
Next, there is an option for “PPh Reduction”. This determines whether the deduction will affect the employee’s PPh21 calculation.
Choose No, if the deduction does not reduce the PPh21 taxable income. Example: Salary IDR 5,000,000, cash deduction IDR 100,000, so the taxable income remains IDR 5,000,000 because the cash deduction is set to “No”.
Choose Yes, deduct from the Basic Salary/Fixed Allowance if the deduction reduces the PPh21 taxable income.
Example: Salary IDR 5,000,000, deduction IDR 500,000, so the taxable income becomes IDR 4,500,000.
Concrete example, Unpaid leave deduction.Choose Yes, as Pension Contribution or Retirement Contribution
Choose Yes, as Zakat/Compulsory Religious Contributions Paid through the Employer
Make sure your master data for income and deductions is entered correctly! If you encounter any difficulties with the setup, use our Chat portal so we can assist you. Give it a try!