> ## Documentation Index
> Fetch the complete documentation index at: https://docs.filexpress.app/llms.txt
> Use this file to discover all available pages before exploring further.

# Payroll Policies

> Deductions, bonuses, and employer contributions applied in payroll

Payroll policies are the rules applied to each employee when payroll is generated: social security contributions, pension funds, and recurring bonuses or deductions.

## Policy types

| Type | Effect |
| - | - |
| **Deduction (Subtract)** | Deducted from the employee's salary (e.g. employee ISSS, employee AFP, loan). |
| **Bonus (Add)** | Added to the employee's pay (e.g. attendance bonus). |
| **Employer contribution** | Paid by the company (e.g. employer ISSS, employer AFP, INSAFORP). It does **not** affect the employee's net pay; it is recorded for accounting. |

## Create a policy

**1. Go to Human Resources → Payroll Policies → New Policy**

**2. Enter name and description**

**3. Select the type and the calculation**

* **Percentage (%)**: applied to the salary earned in the period. Enter the value undivided (10 for 10%).
* **Fixed amount (\$)**: constant value.

**4. Define limits (optional)**

**Maximum limit** and **minimum** of the calculated amount. For example, the ISSS contribution ceiling.

**5. Configure the ledger accounts**

| Type | Accounts |
| - | - |
| Deduction | **Payable account**: liability where the withheld amount is held (e.g. *ISSS payable*). |
| Employer contribution | **Payable account** (liability) and **Contribution expense account** (e.g. *Employer ISSS contribution*). |
| Bonus | **Expense account** (optional; if omitted the salaries account is used). |

**6. Check Active and save**

**Inactive** policies are kept but are not applied when generating payroll and do not appear in the deduction selection. Useful to temporarily suspend a deduction without deleting it.

## Import from templates

The templates button offers the preloaded statutory policies (in El Salvador: employee and employer ISSS and AFP). When you import a template, the form opens prefilled so you can review it, assign the ledger accounts, and save it.

## Examples (El Salvador)

| Policy | Type | Calculation | Rate |
| - | - | - | - |
| Employee ISSS | Deduction | Percentage | 3% |
| Employee AFP | Deduction | Percentage | 7.25% |
| Employer ISSS | Employer contribution | Percentage | 7.5% |
| Employer AFP | Employer contribution | Percentage | 8.75% |
| Loan deduction | Deduction | Fixed amount | \$100.00 |

> [!NOTE]
>
> When generating payroll, each policy can be turned off per employee (for example, a pensioner who does not contribute to AFP). Income tax withholding is not a policy: it is always calculated using the [income tax tables](https://docs.filexpress.app/en/docs/rrhh/tablas-impuestos.md).


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