Increments, revision planner and bonus
Try salary revision scenarios against your budget. Run the yearly increment cycle with proposals, approval by HR then top management, letters and arrears. Pay the statutory bonus and your own bonuses through payroll.
PLANSFrom Growth
The problem it solves
- The increment sheet is built in Excel from last year's salaries, and nobody knows the full cost until payroll runs.
- Increments approved in June for April are paid late, and the arrears are worked out by hand.
- The statutory bonus is calculated on the wrong wages or for people who are not eligible.
- Letters are typed one by one after the salaries have already changed.
How it works
- Before the pay review, open a plan in the Revision Planner. Set the effective date, the departments, the yearly budget and the employer cost on top as a % of the increase. Add scenarios: as the increment policies say, one % for everyone, or a % by rating and grade.
- Press Work Out the Scenarios. Each shows the headcount, how many get an increase, salaries now, the increase, employer cost and total. It also shows average % and budget left, by department and by employee. Choose one and send it to top management.
- The approved plan starts the increment cycle with its budget, or you start one yourself, or from a closed appraisal cycle. List Employees fills the proposals: eligibility and why not, rating, current salary, %, increase and new salary.
- Adjust the proposals. The yearly cost and the budget left follow; a cycle over its budget, or over a department's budget, cannot be sent. Send for Approval: HR, then top management.
- Press Revise Salaries. The new salaries take effect from each effective date, and increment letters are issued from your template. The next payroll pays the arrears for months already paid.
- For a bonus, make a Bonus Declaration for the period, press Calculate, check the lines, and send it for approval. Once approved, each amount goes to the payroll of the month you chose.
Everything it does
Increment policies
- Basis: a fixed month for everyone (April to start with) or the anniversary of joining or confirmation
- Minimum service: 12 months to start with; less than that waits for the next cycle or gets a pro-rata increment, from 6 months
- Confirmed staff only (on), a minimum rating, and not with a disciplinary action in force (on)
- Method: entered by HR, the same % for everyone, or by rating and grade from a rating matrix
- New salary rounded to 10 to start with (or 100, or not at all)
- Policies set by scope, so departments, grades or locations can follow different rules
Increment cycle
- Effective date, departments, a yearly budget and budgets per department, checked before sending
- Proposals on the current CTC or monthly gross, with % and new salary editable
- Statuses: Draft, Proposals, Waiting Approval, Approved, Salaries Revised, Cancelled
- Can start from a closed appraisal cycle, with each person's latest shared rating
- Revise Salaries adds a dated salary record to the history; increment letters come from your template, checkable by QR
- Confidential salaries are hidden from those who may not see them, with a count of how many
Arrears
- When a salary takes effect on a date already paid, the next payslip pays the difference, component by component, for up to 12 months back
- PF and ESI follow the arrears; professional tax, labour welfare fund and TDS of past months are not worked out again
- Arrear lines are marked on the payslip
Revision planner
- Same eligibility as the increment cycle; Count Those Not Eligible Too shows the cost of giving everyone the increase
- Detail by department and by employee
- An approved plan cannot change, and a plan changes no salary; only the increment cycle does
Statutory bonus (Payment of Bonus Act)
- Eligible up to monthly bonus wages of 21,000 (a setting); above it the person is not eligible
- Calculated on at most 7,000 a month (a setting; type the minimum wage there when it is higher)
- Declared % between the minimum 8.33 % and the maximum 20 % (settings)
- Minimum 30 days worked in the period (a setting)
- Bonus wages are the earnings you mark as bonus wages on the salary component
- Worked out from approved and paid payslips of the period, rounded to the rupee
- Not built: the allocable surplus and set-on / set-off working, and the bonus register forms; you decide the %
Company bonus and incentives
- Calculated as % of bonus wages earned, % of gross earned, or a fixed amount
- Fixed amount pro-rata for service in the period (on to start with)
- Eligibility: minimum service, minimum attendance %, minimum rating, staff categories
- Two plans come ready: Statutory Bonus (8.33 %) and Festival Bonus (5,000 after 6 months of service)
- Revises: a later declaration pays only the difference, as bonus arrears
- Paid as a payroll input in the month of Paid With Salary of; bonus is taxed in that month's TDS
- Reports: Increments, Increment Budget against Actual, and statutory bonus accrued in the provisions report
Who uses it
HR or payrollBuilds revision plans, runs the increment cycle and bonus declarations, approves at the HR level.
Top managementApproves revision plans, increment cycles and bonus declarations, or sends them back.
EmployeeReceives the increment letter, and sees the new salary, arrears and bonus on the payslip.
Where you use it
- Web: HRMS > Performance and Pay Review > Increments and Bonus (Increment Cycles, Bonus Declarations, Revision Planner) and Configuration (Increment Policies, Bonus Plans)
- Web: Approvals inbox for revision plans, increment cycles and bonus declarations
- The SmartMy HRMS app: revision plans with their scenarios, cost and departments for HR, payroll and top management, and approvals. (Built and in testing, not in the app stores yet)
- Not in the app: increment cycles and bonus declarations are prepared on the web
What you control
Settings
- Increment policy: fixed month April, 12 months' service, pro-rata from 6 months or next cycle (next cycle to start with). Also confirmed only, no disciplinary action, method, rating matrix and rounding to 10
- Revision plan: budget a year, employer cost on top % (0 to start with)
- Bonus plan: kind, calculation, default %, eligibility, the component it is paid as
- Statutory bonus: 21,000 eligibility, 7,000 ceiling, 8.33 % to 20 %, 30 days
Approvals
- Salary revision plan: top management
- Increment cycle: HR, then top management; with the chain, the levels you set (the ready one: compensation approver, then top management)
- Bonus: HR, then top management; with the chain, the levels you set
Notifications
- Revision Plan Decided: to the person who made the plan when it is approved or sent back, by email and in the app's inbox
- Approvers get each waiting cycle, declaration and plan in the approvals inbox
Questions
Can we see the cost of the increments before deciding?
Yes. The Revision Planner works out each scenario's yearly increase and employer cost against your budget, by department and by employee, before anything changes.We approve increments in June for April. Who works out the arrears?
Payroll does. The new salary takes effect from April. The next payslip pays the difference for each month already paid, component by component, with PF and ESI.Do increments have to follow appraisal ratings?
No. A policy can use a rating matrix, the same % for everyone, or amounts entered by HR. A cycle can start from a closed appraisal cycle or on its own.Does it calculate the statutory bonus?
Yes. It applies the eligibility wage, the monthly ceiling, the minimum and maximum % and the 30-day rule from the plan. It works on bonus wages from approved payslips. You declare the %; the allocable surplus working and the bonus register forms are not built.Can a bonus be revised after it is paid?
Yes. Make a new declaration that revises the earlier one. Only the difference is paid, as bonus arrears.Related features
PAYROLLSalary components, structures and revisionsBuild every salary component on a form and group them into templates. Give each employee a salary by annual CTC or monthly gross with the breakup worked out, and keep every revision with its date.PAYROLLPayroll runs, approval and lockRun payroll per Entity and pay period straight from the attendance record, with joiners, leavers and mid-month revisions worked out. Approvers review it on one screen, salaries can be held and released, and a paid payroll is locked and reopened only with a reason.PERFORMANCE, CONDUCT, LEARNINGAppraisals and 360 degree reviewsRun each appraisal as a cycle: weighted goals, reviews by the employee, manager, peers and direct reports, HR calibration and a final rating. That final rating is the one your increment cycle and bonus plans read.STATUTORY AND TAX, INDIAGratuity and provisions for bonus and leaveEach month the system works out the gratuity every employee has earned so far and books the part not yet provided in your accounts. One Provisions report shows what you owe your people on any date: gratuity, statutory bonus and leave at the encashment rate.LETTERS, CARDS, DOCUMENTS, ASSETSEmployee documents, letters and ID cardsKeep each employee's documents with scans and a reminder 30 days before one expires, and track the original certificates you hold and lend back. Issue letters from templates with a QR code anyone can check, and print ID cards with a re-issue charge taken through payroll.ACROSS SMARTMY HRMSApproval chains and one approvals inboxEvery HR request, from a day's leave to the full and final, goes through its approval chain and waits in one Approvals inbox. Levels, approvers, reminders, escalation and stand-ins are settings you control, per Entity and kind of request.
See your own month run in it.
Tell us how many people you have, how you take attendance and how your salary is structured. We will show you SmartMy HRMS set up that way.