A stipend is a fixed payment that is paid monthly to an intern as an allowance during the training period. It is not the same as salary payment but more of a compensation in lieu of the training given, or expenses incurred.
It is a payout given to individuals who are not regular company employees but who are interns and trainees.
The process to pay stipends to the interns.
Create the component stipend.
Update the Stipend in the Employee Master
How to create a stipend component.
On the Home Page click “Payroll”.
Scroll down to “Utilities”.
Click “View Settings”.
All the created salary components will be displayed.
Click “New”.
Update the following details:
Name: Enter the name of the Salary Component as Stipend
Abbreviation: Enter the short name of the component. Example: “STIP” for Stipend.
Effective Date: By default, the effective date will be considered as 1st April of the Current Financial Year.
Paid Component: Check the box if the Component is part of the employee's salary and needs to be displayed in the payslip.
Select the Pay Type as Earnings from the drop-down.
Select the tax status as Taxable/Non-Taxable as applicable.
Select the Calculation Type as
Flat: if the component is not formula-based and should be entered manually while employee creation or salary changes.
Fixed: if the salary component is fixed and does not change monthly.
Enable these options.
- Attendance Dependent: Check the box if this component needs to be paid based on attendance.
- Part of CTC: Check the box if you want this component to be part of the CTC.
- Create Dependent Component: Check this box so that the arrears /recoveries component will be created separately. This is applicable if the component is fixed in nature.
- Is Active: If the “Active” box is checked, the component will reflect in the pay register and all the reports.
If unchecked the created component will not reflect in the Pay Register and other reports even though it is created.
Click ‘ADD’ to create the component.
How to update the Stipend in the Employee Master.
Once the component is created, it should be assigned to the employees so that this becomes part of the salary.
Go to Employees > Payroll Settings > Salary Components
Click “Pay Allocation”.
Assign the component to the specific employees.
To know more about allocating salary components, please click here to refer to “How to allocate the salary component”.
Once you have allocated the components, please process the payroll for the employees.
Note: When you are onboarding the employee, you need to enter the stipend on the Salary Details page.
Enter the CTC amount -Monthly Stipend*12.
Enter the monthly amount against the “Stipend” box.
Click “Finish”.
Once you have processed the payroll you can check the payslip for the employee or by downloading the salary register you can check the stipend amount for the employee.
