Setup checklist: before the first employee, leave request and pay run

The order to set things up, with what goes wrong when a step is missed. Company page first, then employees, then attendance and leave, then payroll, then the tax rule.

HR & payroll Setup
5 min read
Updated October 20, 2026

For Administrator HR officer Payroll officer Accountant

On this page

The idea
1. The Company page
2. Numbering
3. HR settings and employees
4. Attendance
5. Leave
6. Payroll
7. Before every year and every month
Common questions

The idea

Most "it does not work" calls in this module come from one missing setup step. Work down this list once, in order. Each line says where to do it and what you will see if it is missing.

1. The Company page

Open Company setting (it is the page that holds the company, the fiscal year and the branches).

Set	Why	If missing
Fiscal year, with its pay periods	Pay months come from the fiscal year; tax is projected over them	The pay run offers no period
Branch (if your company works by branch)	Employees, shifts, holidays and approvers belong to a branch	Lists are empty, offers cannot be made
Department, Designation (and Class or Level if your Designation level uses them)	Every employee has a department and a designation; salary is by designation	Employees cannot be added; the pay run lists nobody
Elected party and Elected designation (elected-member payroll only)	Members belong to a party and have a designation	The member lists have nothing to choose from
Attendance configuration (attendance only)	Grace minutes and the hours that count as a full or half day absent	Attendance is judged with zero grace
Approver (sub-tabs Approver group and Module)	Who approves loans (advance approver, payment approver) and payroll (salary approver): put the approvers in a group for the branch, then give the group the module	"Approver not set" on a loan request; no approve button on payroll

2. Numbering

On Document numbering, add an active series, covering the dates you will use, for each of:

Journal voucher (the payroll journal) for each branch;
Office visit (each visit request gets a number).

3. HR settings and employees

Human resource setting: overtime rules and remuneration rules, ethnicities, insurers (Human resource settings).
Add employees by the Human resource process or Import (The employee record). Set each person's Reporting person, and the department's manager and alternate manager, so managers see their team (Who approves what).
Give each employee a Device user id if you use attendance devices.

4. Attendance

Attendance year with its months (Set up attendance: company limits and the attendance year).
Shift, Shift management (the roster) and Employee shift (Shifts: the shift, its roster, employees and overrides).
Devices (Attendance devices and RFID cards) and Holidays (Holidays and floating holidays).

5. Leave

Leave types, leave rules for each job type, and opening balances (Set up leave types and rules, Opening leave balances).

6. Payroll

Payroll configuration
Who
Payroll officer and accountant
Where
Payroll configuration (both tabs)
What changes
PF or SSF, gratuity, CIT, tax limits, loan limit, absence settings, and every ledger and the two groups (Payroll configuration). For SSF, tick the box in front of PF/SSF account no and enter the SSF percentages, and enter them again at every later save. If your employees have grades, ask Penahak support to confirm grade pay is on after this save.
Payroll items
Where
Payroll setup › Payroll item
What changes
Each allowance and deduction once, with its tax rule (Payroll items: the allowances and deductions you can use).
Salary
Where
Payroll setup › Designation salary
What changes
A basic salary for every designation, or the employee's own salary (Designation salary and grades).
Allowances and deductions
Where
Allowance and Deduction tabs
What changes
Who gets what (Allowances and deductions: by designation and by employee).
Tax rule
Where
Payroll setup › Tax rule
What changes
The slabs for the fiscal year, for Single and Married. Without them nobody can be paid (Tax rules: slabs, discounts, rebates and relief).
Employees' payroll details
Where
Employee › Payroll details
What changes
Bank, PAN, PF or SSF, CIT, tax group (An employee's payroll details).
Loan types
Where
Payroll setup › Advance
What changes
The kinds of advance and loan (Loan and advance types).

7. Before every year and every month

Add the next fiscal year, the next attendance year and the tax rule for the new fiscal year before their first day.
Before each pay run: overtime approved, absence entered, one-off items entered, variable rates set (Run the month's payroll).

Worked example: the minimum set-up of a one-branch company

Step	What the company enters
1. Company page	A fiscal year with its pay periods. The branch Head office, the department Accounts, the designation Accountant. An Approver group for Head office with the salary module
2. Numbering	An active Journal voucher series for Head office covering the dates in use, and an active Office visit series
3. HR settings and employees	One overtime remuneration rule. Two employees, each with a Reporting person, and a Device user id if devices are used
4. Attendance	The attendance year with its months. A Morning shift from 09:00 to 17:00, its roster and the two employees mapped to it
5. Leave	Annual leave and Sick leave as paid types, rules of 12 and 8 days for the job type, and an opening balance for each employee
6. Payroll	Payroll configuration with every ledger and both groups. The items Meal allowance and Staff welfare fund. A Designation salary of 30,000 for Accountant. The Tax rule for Single and Married. Each employee's Payroll details with the bank and PAN. A loan type, Salary advance
7. Before the first month	One test pay run for one employee, compared with a hand calculation, then deleted

Common questions

Do I need attendance set up before I can run payroll?

No. Attendance and payroll are separate parts of the module. Without attendance, absence is entered by hand on Absent day entry (Absence, unpaid leave and attendance in payroll).