Notice Pay: It is the amount paid to an Employee by the Employer when the former is terminated from the job before the end of the notice period.

Notice Recovery: Amount recovered from the Employee by the Employer if the former leaves the job before/without serving the Notice period.

 

To create both Notice Pay and Notice Recovery components, 

 

Go to Payroll>>Salary Components >>Click “New” or

Go to Settings >> Salary components >> click “New”.

 

Create the components using the below configuration.

 

Component
 

Notice Pay
 

Notice Recovery
 

Name
 

Notice Pay
 

Notice Recovery
 

Abbreviation
 

NP
 

NR
 

Paid Component
 

Yes
 

Yes
 

Pay Type
 

Earning
 

Deduction

Tax Status
 

Taxable
 

Non-Taxable
 

Calculation Type
 

Flat / Formula
 

Flat / Formula
 

Map To
 

Notice Pay
 

Notice Recovery
 

Round off Value
 

Nearest to INR 1/-
 

Nearest to INR 1/-
 

Component Type
 

Variable
 

Variable
 

Is FBP component
 

No
 

No
 

Attendance Dependent
 

No
 

No
 

Part of CTC
 

No
 

No
 

Active
 

Yes
 

Yes
 

FFS component
 

Yes
 

Yes
 

 

Click “Add”.

 

Once created and configured as above, the components need to be allocated to all Employees.

 

For more details on how to allocate a component, please click here.  

 

Please Note: If the calculation type is updated as “Formula” in the above configuration, then update the precise formula in the formula field as per the HR policy.

 

Later, while processing FFS:

a. If the calculation type is “Flat”, update the figures directly in the fields provided.

b. If the calculation type is “Formula”, then update the Notice Pay or Recovery days in the fields provided.