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.