Payroll — the concepts

Five ideas explain almost everything in the Payroll menu. Reading them once saves a great deal of confusion.

1. Companies assemble their own salary components

The system does not impose a fixed list of allowances. A company builds its own components: Basic Salary, Position Allowance, Transport Allowance, Meal Allowance, Cooperative Deduction — whatever your company uses.

Every component carries a set of switches telling the system how to treat it:

Switch	What turning it on means
Subject to income tax	This component is taxed
Counts toward social security base	Included when calculating contributions
Counts toward festive allowance base	Included when calculating the allowance
Counts toward monthly wage for overtime	Included when calculating the hourly overtime rate
Fixed allowance	Used when checking the basic-salary proportion rule
Prorated for partial months	Reduced proportionally if someone joins or leaves mid-month

These switches decide everyone's pay

One wrong switch — forgetting to tick "subject to tax" on an allowance, say — and every employee's tax is wrong.

Check twice when creating a new component, and check again before the first run that uses it.

2. The catalogue differs from the assignment

	Salary Components (catalogue)	Employee Payroll Data (assignment)
Answers	Which components the company can pay	Which components a given person actually receives, and how much
Example	"The company has a Transport Allowance component"	"Budi receives Rp 500,000 Transport Allowance a month"

Creating a component in the catalogue pays nobody. It has to be assigned to an employee first.

3. "Effective from" keeps old payslips correct

Every component assignment carries an effective from date.

If Budi's salary rises on 1 July, a recalculated June payslip still uses the old salary. Without that date, recalculating an old period would quietly rewrite history.

Do not edit the old amount when granting a rise

Add a new assignment with the correct effective date.

Changing the figure on the old assignment will change payslips already issued, if that period is ever recalculated.

4. One "run" produces many payslips

A single payroll processing pass is called a run. One run produces payslips for many employees at once.

Run type	For what
Regular	Monthly salary
Festive allowance	The statutory holiday allowance
Bonus	Bonuses and incentives

All three can coexist in the same month. In March you can have a March salary run and a March festive allowance run, neatly separate, each with its own payslips.

5. Four statuses, and why it is not paid straight away

Status	Meaning	Can employees see it?
Draft	Still being calculated, repeatable as often as needed	No
Review	Submitted, awaiting someone else's check	No
Approved	Checked and approved	Not yet
Final	Locked, payslips issued	Yes

Why the layers

Because this is money. Whoever calculates the payroll may not approve their own figures — a second pair of eyes is required.

The system enforces it: if you did the calculation, the approve button refuses.

A finalised run cannot be reopened

The money has moved and the payslips have been issued. Corrections are recorded as adjustments in the following period — as in ordinary accounting practice.

Where payslip figures come from

This is the question new HR staff ask most. A payslip figure is not one source but six, added together when the run is calculated.

Which means: wrong attendance produces wrong pay, and fixing it has to happen before the run is finalised.

Pages in this menu

• Initial setup — once only, before the first run
• The monthly process — every period's routine
• Festive allowance, bonus, loans
• Payroll Recap — what was paid this year, and to whom
• Payslips — for employees