🔹Benefit Module
Benefit Module
The Benefit Module lets you manage employee reimbursement and flexible benefit components that form part of an employee's CTC — for example Fuel, Telephone, Driver, Medical, Internet Reimbursement, and LTA. These benefits are non-taxable when the employee submits valid supporting documents against the eligible amount.
How benefits work
The company allocates a benefit amount to the employee.
The employee submits claims with supporting documents.
The reporting manager or admin approves the claims.
The approved (supported) amount stays non-taxable.
Any unclaimed or unsupported amount becomes taxable and is moved to the mapped taxable head during Year-End processing.
For example:
if an employee is eligible for ₹10,000 and submits support for ₹8,000, then ₹8,000 is tax-free and the remaining ₹2,000 becomes taxable.
How to Configure the Benefit Module?
This section covers everything needed to set up the Benefit Module before any transactions begin — from creating the components to configuring settings and notifications.
1. Create the Benefit Components
Path: Settings > Payroll > Salary Components.
Step 1: Log in to the Cloud portal, go to Settings, then Payroll, and open Salary Components.
Step 2: Click the + (Add Component) button.
Step 3: Create the benefit component with these details
Field Name (short code), Label Name (full benefit name), Component Type (Reimbursement)
Frequency (Monthly or Annual),
and LOP Effect (applies to Monthly benefits only).
Step 4: Create a matching taxable component for the benefit.
Name it after the benefit (for example, Telephone Reimbursement Taxable), set its behaviour to Monthly Input Component, and mark it as Taxable. This is used to transfer unsupported amounts during Year-End.
Step 5 (optional): To show the benefit amount on payslips or salary registers, create a display component set to Include in Gross, with a Percentage formula mapped to the benefit component.
2. Map Components to the Salary Structure
Path: Payroll > Salary Structure
Step 1: Go to Payroll, then open Salary Structure.
Step 2: Select the appropriate category, Locate the benefit component, click the three dots, and click Edit. Set the component as Direct, then Save.
Step 3: Locate the corresponding taxable component and do the same — set it as Direct and Save.
Step 4 (optional): If you created a payslip component, locate it, set it as Percentage, add the benefit component in the Percentage Formula, and Save.
3. Configure Benefit Settings
Financial Year Settings
Path: Benefit > Settings > Financial Year Settings
set the financial year, payroll cut-off, posting dates, and benefit processing rules.
Categories
Path: Benefit > Categories
assign benefits by category (for example, Management gets Fuel, Telephone, and Driver). For each category, set the component mapping, display sequence, income tax matching, and order number.
Notification Settings
Path: Benefit > Notification Settings) —
set up notifications for claim submission, manager approval, claim rejection, and final approval.
Tax Matching
Income Tax > Income Matching
map each benefit component to its taxable component. Set Projection to No, Section to Gross 17(1), and Tax Deduction Mode to Normal or One-Time
4. Approval Matrix
Before approving claim entries, you need to assign managers through the Approval Matrix.
Follow the process given here to configure Approval Matrix: https://docs.pockethrms.com/hr-and-admin-portal/cloud-configuration/employee-management/approval-matrix#how-to-view-or-add-approver-for-an-employee
How To Do Transactions in Benefit Module?
This section covers the day-to-day operations — allocating benefits, entering and approving claims, running the payout and payroll, reporting, and year-end and exit settlements.
5. Allocate Benefits to Employees
Path: Employee Profile > Salary > Benefit Components
Step 1: Open the employee's profile, go to Salary, then Benefit Components.
Step 2: Set the Opening Amount (their eligibility), the Effective Date, and the Component Type (Monthly or Annual).
The effective date is 1st April for existing employees, or the date of joining for new joiners.
Step 3: For large numbers of employees, use Bulk Import instead (Benefit > Import). Use the component's Field Name in the import file, with columns for Employee Code, Benefit Field Name, Fixed Current Entitlement, Effective Date, Opening Accumulative Amount, and Opening Balance Excess Amount.
6. Enter Claims
Path: Benefit > Claim Entry
Step 1: HR/Admin can enter a claim,
filling in the benefit component, claim date, bill date, bill number, claimed amount, remarks,and supporting documents.
Step 2: Employees can submit their own claims via ESS under Benefit > Request Claim Entry — select the component, enter the bill details and amount, upload documents, add remarks, save, then final submit.
How claims are handled
The bill date must fall within the claim month (a September claim needs a September bill).
Over-claiming is allowed, but only the eligible amount is processed; the rest adjusts in future cycles.
Unused amounts carry forward and add to the next month's eligibility.
Monthly benefits are prorated for LOP, based on present days out of total days.
7. Approve Claims
Step 1: Make sure the Approval Matrix is configured, with Benefit Module set to Yes, Approval Required set to Yes, and Approval on Cancel set to Yes.
Step 2: The manager reviews claims under Benefit, the Unapproved Claims viewing the claim, checking the documents, adding remarks, and approving or rejecting.
8. Run the Monthly Payout
Path: Benefit > Utilities > Monthly Payout
Step 1: Go to Benefit, then Utilities, and open Monthly Payout.
Step 2: Select the month and process the payout.
Important Note: Monthly Payout is mandatory before payroll processing. Payroll will not run until the payout has been executed — and it must be run even when the claim value is zero.
9. Payroll
After the monthly payout, approved benefits reflect in salary, benefit components appear on the payslip (if configured), and taxable amounts appear under their taxable heads. Payroll then processes normally.
10. Reports
The module provides several reports: Benefit Claim Report, Manager Remarks Report, Approval Status Report, Benefit Register, Employee Benefit Ledger, and Monthly Payout Report. Between them they show claim amounts, approved amounts, pending claims, manager remarks, and taxable transfer details.
My Report — employee's own benefit and claim details.
My Team Report — manager's view of their team's claims.
Employee Report — admin's view across all employees.
11. Year-End Process
Path: Benefit > Utilities > Year End Process
Step 1: Go to Benefit, then Utilities, and open Year End Process.
Step 2: For March, run the Year-End Process instead of the Monthly Payout — for a single employee or all employees.
The system then calculates total eligibility, claimed amount, supported amount, and unclaimed amount, and transfers the balance to the mapped taxable head.
12. Full & Final (F&F) Process
Path: Benefit > Utilities > F&F Process
Run this when an employee exits the organization.
Step 1: Complete any pending claim entries.
Step 2: Process the employee's separation.
Step 3: Run the Benefit F&F Process (Benefit > Utilities > F&F Process).
Step 4: Execute the Full & Final settlement.
Step 5: Compute the income tax impact.
Best Practices
Create the benefit and taxable heads together.
Set up income tax matching right after creating the components.
Run the monthly payout before every payroll cycle.
Make sure the Approval Matrix is configured.
Check that bill dates belong to the claim month.
Use bulk import for large employee populations.
Run the year-end process before March payroll closure.
Complete claim processing before F&F settlement.
For any queries, contact support@pockethrms.com
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