Understanding salary components and structures

The building blocks of payroll

In Dapplon, a salary component is a single line item on a payslip — for example, Basic Salary, House Rent Allowance (HRA), or Provident Fund. A salary structure is a named template that groups several components together and defines how each is calculated.

You create components once and reuse them across multiple structures.

Types of salary components

Earnings — money paid TO the employee. Examples: Basic, HRA, Special Allowance, Performance Bonus.

Deductions — money subtracted FROM the gross. Examples: Provident Fund (employee share), Professional Tax, TDS.

Employer contributions — these appear on the payroll cost report but NOT on the employee's payslip. Examples: Employer PF, Employer ESI, Gratuity provision.

Creating a salary component

1. Go to Payroll > Salary Components
2. Click Add Component
3. Set the Component Name (e.g., House Rent Allowance)
4. Set the Type: Earning, Deduction, or Employer Contribution
5. Set the Calculation Method:

- Flat Amount — a fixed rupee value per month

- Percentage of Basic — e.g., HRA = 40% of Basic

- Percentage of Gross — for tax calculations

1. Set whether it is taxable (Yes / No / Partially)
2. Click Save

Creating a salary structure

1. Go to Payroll > Salary Structures
2. Click New Structure
3. Name the structure (e.g., "Senior Engineer — Bangalore")
4. Add components from the left panel to the structure by clicking the + icon
5. Set the order — earnings appear first, deductions below
6. Click Save

Assigning a structure to an employee

1. Go to Employees and open the employee's profile
2. Click the Payroll tab
3. Click Assign Salary Structure
4. Select the structure from the dropdown
5. Enter the employee's Annual CTC
6. Dapplon automatically back-calculates each component based on the percentages in the structure
7. Click Save