HR & Payroll Setup

Set up people, attendance, payroll and country compliance on Frappe HRMS.

Like the ERP foundation, much of this has sensible defaults — your job is to shape it to your workforce and your country's labour rules. Payroll especially rewards getting the structure right before the first run.

How to navigate: every screen has a search bar at the top (the "awesome bar"). Type the name of any record to open it (e.g. Employee, Shift Type), or type New Employee to create one. Time-off and attendance also have a dedicated HR mobile app your staff can use. Each step below gives you the term to search.

Work top to bottom and tick each box as you go.

Organization and people

The skeleton your employees hang on. Build it before adding people.

[ ] Departments — search Department. Mirror your real structure (e.g. Cutting, Sewing, Finishing, Quality, Admin). Why: drives approval routing, reporting and cost grouping.
[ ] Designations — search Designation. The job titles people hold (e.g. Operator, Line Supervisor, Cutter). Why: used for org charts, salary defaults and filtering — separate from who reports to whom.
[ ] Employment Types — search Employment Type. Define your categories (Permanent, Contract, Apprentice, Seasonal). Why: seasonal and contract labour is common in garments; this flag drives different leave, payroll and compliance handling.
[ ] Holiday List — search Holiday List. Add your weekly off and the year's public holidays. Why: attendance and payroll both read it — wrong holidays mean wrong pay and false absences.
[ ] Employees — search New Employee. Fill Name, Company, Department, Designation, Date of Joining, Employment Type and Reports To. Add bank and statutory IDs for payroll. Why: the Employee record is the master every other HR document points to. Use Data Import to load many at once.

Attendance, shifts and leave

How time worked and time off are captured.

[ ] Shift Types — search Shift Type. Define your shifts (start/end, breaks) and how attendance is marked — manual, or auto from check-ins. Why: shifts drive working hours, late marking and overtime calculation.
[ ] Employee Check-in — search Employee Checkin, or capture via the HR app / a biometric device. Why: check-ins are the raw IN/OUT events; with auto-attendance on a Shift Type, they roll up into attendance automatically — no manual marking.
[ ] Attendance — search Attendance (or let it auto-generate from check-ins). Why: the daily present/absent/half-day record that payroll counts. Decide early: manual marking vs. automatic from check-ins.
[ ] Leave setup — search Leave Type, then Leave Policy and Leave Allocation. Define leave types (annual, sick, unpaid), bundle them in a policy, and allocate balances. Why: sets what staff can apply for and how much; without allocation, balances are zero and applications fail.
[ ] Overtime — handled via shift rules and a salary component (see Payroll). Why: overtime is both a time concept (hours beyond the shift) and a pay concept (a rate). Both sides must agree.

Payroll

Turning attendance and structure into pay. Set this up in order — each step depends on the one above.

[ ] Salary Components — search Salary Component. Create your earnings (Basic, HRA, overtime, production incentive) and deductions (tax, social security, advances). Why: components are the building blocks of every payslip; formulas here drive the maths.
[ ] Salary Structure — search Salary Structure. Assemble components into a reusable structure, with formulas (e.g. earnings based on days present). Why: one structure serves many employees — change it once, not per person.
[ ] Salary Structure Assignment — search Salary Structure Assignment. Attach a structure to each employee with their base pay and an effective date. Why: an employee isn't paid until assigned; the date controls which period it applies from.
[ ] Payroll Period — search Payroll Period. Define the period that taxes and slabs are calculated over (usually the fiscal year). Why: income-tax components need a period to spread and compute correctly.
[ ] Run payroll — search Payroll Entry. Pick the period and employees; it generates Salary Slips in bulk. Review, submit, then pay. Why: this is the actual pay run — built entirely from the structure, attendance and components above.

Compliance by country

Frappe HR includes country compliance presets for many regions — but you must verify them against current law.

[ ] Income Tax Slabs — search Income Tax Slab. Confirm (or create) the tax brackets that apply in your country and link them to your Payroll Period. Why: drives statutory tax deduction on every payslip.
[ ] Statutory components — add country-specific contributions as Salary Components (e.g. social security, provident/pension funds, both employee and employer shares). Why: these are legal obligations, not optional — missing them creates liabilities and penalties.
[ ] Verify against local law — confirm rates, ceilings and filing rules with your accountant or labour advisor. Why: presets drift as laws change; you, not the software, are accountable for correct deductions.

AI Guided Configuration

The org and shift setup above is generic; payroll and statutory compliance are deeply country-specific — exactly where an AI assistant earns its place. Use it to draft your salary structure and the statutory pieces, then verify.

Copy the prompt below, fill in your country, and paste it into your AI tool (ChatGPT, Claude, Gemini). It's written so the AI coaches you step by step rather than dumping everything at once:

You are my setup guide for Frappe HRMS v16 (running on ERPNext v16). Coach me
ONE STEP AT A TIME — explain a step, ask me anything you need, wait for my reply,
then move to the next. Don't dump everything at once.

About me:
- I run a GARMENT MANUFACTURING business in [YOUR COUNTRY].
- I'm the owner/administrator — I know my workforce well but I'm new to HRMS.
- Infer my likely currency and standard statutory rules from my country, and
  confirm them with me before we rely on them.
- My workforce includes machine operators often paid partly by output (piece rate)
  and seasonal/contract labour — keep that in mind.

Work through these together, in order:
1. Org structure — sensible departments, designations and employment types for a
   garment factory here.
2. Leave & holidays — the statutory leave types and minimum entitlements, plus
   public holidays for my country this year.
3. Working time — standard working hours, overtime rules and rates required by law.
4. Salary structure — propose the earnings and deductions (Basic, allowances,
   overtime, any production incentive) and GENERATE the Salary Components and a
   Salary Structure I can recreate in HRMS, with the formulas.
5. Statutory compliance — income tax slabs, social security / pension and any other
   mandatory contributions (employee AND employer shares), with current rates.
6. Anything country-specific a garment manufacturer commonly misses (e.g. bonuses,
   severance, minimum wage).

Rules:
- One step at a time; check I've finished a step before moving on.
- Be concrete and map each step to the actual HRMS screens.
- Where rules vary or you're unsure, SAY SO and tell me to confirm exact figures
  with a local accountant or labour advisor — don't guess at rates.

Caution