Getting Started with Payroll: Principles and Relationships
This help chapter will guide you through working with the "Employees" module and show you what to set up and where, so that you run into as few problems as possible when calculating payroll. It also explains the relationships between payroll calculation and its transfer to accounting.
Groups of Persons
If you want to organize employees into groups, it is best to prepare these groups in advance directly in the Employees module. You can add more groups at any time.
Business Partners
In the "Business Partners" module, under the "Company Addresses" option, you need to add the addresses of the health insurance companies, the relevant Czech Social Security Administration office, and the relevant tax office. You must always select the appropriate relationship type as well – tax office, health insurance, social security. This is also necessary for filling in forms correctly. At the same time, don't forget to set up bank details to make it easier to pay the resulting liabilities.
Accounting
To automatically post payroll costs and payroll-related liabilities, it is a good idea to set up the necessary internal document types, liability types, and posting rules. Some of these types and rules are already prepared. You need to review them and modify them if necessary to match your chart of accounts.
The following liabilities are involved:
Social insurance
Health insurance
Because there are several health insurance companies, each employee has their own health insurance company filled in on their record. If you want a separate analytical account for each health insurance company to track liabilities, you need to create a separate group for each insurance company and set the account for the Credit side in the "Basic Information" tab. There is currently no additional field dedicated to payroll, but you can use the "For Received Invoices" field for this purpose.
Advance tax
Withholding tax
Resident – tax
Salary advance
Cash on delivery
Deductions
The following internal documents are involved:
Gross salary
Salary compensation
Deductions
You can add these liabilities and internal documents at any time.
If you post to cost centers, each employee has a cost center filled in on their record (on the main panel). Costs will then be posted to these cost centers.
The types prepared in this way are then selected in the payroll settings, as described in the next chapter, "Payroll Settings". They are then generated automatically with a single click of the "Generate liabilities" button in the "Payroll Update" option.
If you divide your employees into groups, you can select a different internal document for posting gross salary and salary compensation for each group of persons. When they are generated, the posting will then follow the settings in the group.
If you need to single out certain employees (regardless of whether they belong to a group), you can select a different internal document for posting gross salary and salary compensation, and a different internal document or liability for posting salary deductions, on the employee's record. When generated, the posting will then follow the settings for that employee.
Payroll Settings
This is another important step in getting the Employees module up and running. In the "Company" menu, under the "Settings" option, select the "Modules" tab -> "Employees". When filling in this tab, follow the relevant help article. Don't forget to fill in all the tabs.
Human Resources
Once you have prepared everything described in the previous sections, you can go to the "Human Resources" option and start preparing individual employee records.
The "Basic Information", "Other", and "Address" tabs contain personal data.
Personal data related to payroll calculation must be filled in on the "Payroll Parameters" tab. This contains the data used as the basis for claiming tax credits. You indicate whether the employee has signed the tax declaration, whether they claim a credit for themselves – as a taxpayer or a student – or a disability credit. The employee's health insurance company is also set here, among other things.
Don't forget to fill in all the sub-tabs. If an employee claims a credit for themselves as a taxpayer, they must select this on the "Tax Credits" tab; it is not enough to select that they have signed the tax declaration.
If the employee will claim a credit for a dependent partner, fill in the "Dependent Partner" tab.
If the employee will claim a credit for a child, fill in the "Children" tab. You must then also select the child on the "Payroll Parameters" tab, which has a separate "Tax Credits" tab.
If the employee receives a pension, enter this information on the "Other" tab.
If the employee will claim any other credits (disability, student, etc.), add the details on the "Payroll Parameters" tab, which has a separate "Tax Credits" tab.
On the "Bank Details" tab, enter the account to which you will send the employee's salary (mark it as primary). Enter any other accounts to which you will send amounts deducted from the employee's pay.
If you have set up salary payment to a bank account, the employee's bank account marked as primary is pre-filled on the payroll document.
If no account is marked as primary, the first account from a randomly ordered list of the employee's bank accounts is used. Therefore, it cannot be guaranteed which account will be selected.
If salary payment to a bank account is not set up, the bank account is not pre-filled on the payroll document.
Pay special attention to the "Employment" tab. Don't forget the important "Work Commitment" sub-tab. Without it being filled in, the salary may not be calculated correctly. The program cannot tell whether this tab was left blank by oversight or on purpose. If you want to post the gross salaries of different employees differently, you can set this up for each employee. This setting then takes precedence over the initial setup.
If an employee has salary components that recur regularly (monthly salary, allowances, etc.), select them on the "Fixed Salary Components" tab. The components listed there will then be included in payroll every month.
If an employee does not work the entire month because of an absence, select the type of absence on the "Absence" tab. You can later correct this tab in the Payroll Update option using the "Update absence" button.
Also pay special attention to the "Shifts" tab. Each employment relationship and each month has one row. You must mark the shifts worked correctly; this is the only way payroll will be calculated correctly.
On the "Deductions" tab, enter all deductions that you will withhold from the employee's pay – alimony, savings, garnishments, etc. The program cannot yet calculate the amount of a garnishment to be deducted. On this tab, you then select from the "Bank Details" tab the account to which the deduction will be sent. If you want different deductions to be posted differently, you can set up posting for each deduction. This setting then takes precedence over the initial setup.
Salary Components – Input and Selections
This option in the "Employees" module allows you to quickly update certain individual salary components of individual employees, such as bonuses.
Payroll Update
The "Payroll Update" option is the last step in payroll processing. Here you calculate the salary, make any final adjustments, update absences, and generate documents for accounting.
Print Outputs
The "Print Outputs" and "Salary Components – Input and Selections" options let you print the payroll reports you need that you did not find in the previous options, such as in Human Resources or Payroll Update.
You can print reports for your own needs (monthly and annual summaries, for individual employees or for the whole company, etc.), as well as those you are required to submit to health insurance companies, the Czech Social Security Administration, the tax office, and so on.