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Getting Started

Updated30 April, 2026

Initial Setup (First Time)

1. Open Payroll Setup

  • Search for “Payroll Setup” in Business Central
  • Configure all required fields marked with red asterisks

2. Configure Number Series

Set up automatic numbering for:

  • Employee Journal Nos.
  • Pay Batch Nos.
  • Approved Time Entry Nos.
  • Employee Position Nos.
  • Employee Deposit Nos.
  • Open Time Entry Nos.
  • Employee Deposit Journal Nos.
  • Employee Deposit Batch Nos.

3. Set Up General Ledger Integration

  • Employee Journal Template: Select or create a template
  • Employee Journal Batch: Create batch for payroll postings
  • Employee Deposit Batch: Create batch for ACH/direct deposits
  • Check Payment Journal Template/Batch: For physical checks
  • Payment Method Code: Select default payment method

4. Configure Employer Information

  • Employer Name, Address, Registration Number
  • Service Center Code
  • Telephone Number
  • NIS Employer ID

5. Set Calculation Defaults

  • Annual Personal Allowance: Tax-free amount per year
  • Tax Rounding Precision: Usually 0.01 for cents
  • NIS % Allowance: Percentage of NIS deducted from taxable income
  • Min Salary % Allowed: Minimum net pay threshold

6. Configure Check Printing (Optional)

  • Payroll Check Report ID: 72654592 (default)
  • Payroll Check Report Layout: Select custom layout if needed

7. Set Up Email for Payslips (Optional)

  • Enable “Auto Email Payslips”
  • Payslip From Email: sender@company.com
  • Payslip Email Subject: “Your Payslip for %1”
  • Payslip Email Body: Custom message template

Data Import Order

When importing data from templates or external systems, follow this order to ensure proper referential integrity:

Phase 1: Setup & Configuration

  1. Payroll Setup – Configure system-wide settings first
  2. Number Series – Set up all number series for automatic numbering
  3. Departments – Create organizational departments
  4. Positions – Create position codes with default settings

Phase 2: Pay, Deduction & Benefit Codes (PDB)

  1. Pay Codes – Create pay code master records
  2. Pay Code Groups – Create groupings and assign pay codes to groups
  3. Pay Code Posting Groups – Set up GL account mappings for pay codes
  4. Pay Code Posting Setup – Link pay codes to posting groups
  5. Deductions – Create deduction master records
  6. Deduction Groups – Create groupings and assign deductions to groups
  7. Deduction Posting Groups – Set up GL account mappings for deductions
  8. Deduction Posting Setup – Link deductions to posting groups
  9. Benefits – Create benefit master records
  10. Benefit Groups – Create groupings and assign benefits to groups
  11. Benefit Posting Groups – Set up GL account mappings for benefits
  12. Benefit Posting Setup – Link benefits to posting groups

Phase 3: Payroll Calculation Rules

  1. Processing Functions – Define calculation functions with codeunit IDs
  2. Processing Parameters – Configure parameters for each processing function
  3. Payroll Ruleset Headers – Create ruleset templates
  4. Payroll Ruleset Lines – Define calculation steps and priorities within rulesets

Phase 4: Employee Data

  1. Employees (Base BC) – Create or verify employee master records exist
  2. Employee Positions – Assign employees to positions and departments
  3. Employee Allowances – Configure tax allowances per employee (if applicable)
  4. Employee Deposits – Set up bank accounts with priorities for each employee
  5. Employee PDB Assignments – Override default pay/deduction/benefit assignments per employee

Phase 5: Pay Schedules & Templates (Optional)

  1. Pay Schedules – Define pay cycle frequencies (weekly, bi-weekly, monthly)
  2. Pay Batch Templates – Create reusable templates for recurring payroll batches

Phase 6: Transactional Data

  1. Time Entries – Import historical or current time entries (if using time tracking)
  2. Approved Time Entries – Import pre-approved time entries
  3. YTD Values – Import year-to-date values for mid-year implementations
  4. Income Tax Worksheets – Import historical tax calculation data

Import Considerations

Critical Dependencies:

  • ⚠️ Pay Codes must exist before Pay Code Groups can assign members
  • ⚠️ Posting Groups must exist before Posting Setup can create mappings
  • ⚠️ Processing Functions must exist before Ruleset Lines can reference them
  • ⚠️ Positions must exist before Employee Positions can assign them
  • ⚠️ Employees must exist before any employee-specific records (deposits, positions, allowances)

Recommended Import Method:

  • Use Configuration Packages in Business Central for bulk imports
  • Validate each phase before proceeding to the next
  • Test with a small subset of records before full import
  • Always backup before importing large datasets

Post-Import Validation:

  1. Verify all posting setup records have GL accounts assigned
  2. Check that all employees have valid positions and departments
  3. Confirm all employee deposits have priorities set correctly
  4. Test a sample pay batch calculation with imported data
  5. Review Payroll Log for any setup warnings or errors

Master Data Setup

1. Departments

  • Navigate to “Departments”
  • Create departments: HR, Finance, Operations, etc.

2. Positions

  • Navigate to “Positions”
  • Create position codes with default settings:
    • Default Department
    • Default Pay Code Group
    • Default Deduction Code Group
    • Default Benefit Code Group
    • Default Salary

3. Pay Code Groups

  • Create logical groupings: “Salary”, “Overtime”, “Bonuses”
  • Add pay codes to each group

4. Pay Codes

Create individual pay codes (e.g., BASIC, OVERTIME, BONUS)

Configure each pay code:

  • Primary Pay Code: Mark for base salary
  • Posting Group: Link to GL accounts
  • Taxable Income: Flag if subject to income tax
  • Priority: Set processing order (lower numbers first)
  • Based on Pay Code Group: For calculated codes (e.g., overtime based on salary group)
  • Based On Pay Code: For derived codes (e.g., bonus based on basic pay)
  • Pay Factor: Multiplier for calculations (e.g., 1.5 for overtime)

5. Deductions & Benefits

  • Create deduction codes (NIS, Tax, Loans, etc.)
  • Create benefit codes (Employer NIS, Allowances, etc.)
  • Configure posting groups and calculation methods

6. Employee Setup

Navigate to Employees and for each employee:

  • Create Employee Position record
  • Assign Position, Department
  • Set Monthly Salary or Hourly Salary Override
  • Configure Employee Deposits (bank accounts)
  • Assign PDB overrides if needed

7. Employee Bank Deposits

Open employee card → Employee Deposits

Add bank account details:

  • Priority: 1 = first, higher numbers = later (determines deposit order)
  • Bank Name, Account Number: Employee’s bank account details
  • Deposit Amount: Fixed amount (e.g., $500) OR
  • Deposit Percent: Percentage of net pay (e.g., 20%) OR
  • Leave both blank for Remainder (gets all remaining balance)
  • Print Physical Check: Flag to generate check instead of ACH
  • Active: Enable/disable deposit without deleting

Example Multi-Bank Setup:

  • Priority 1: Savings account, $500 fixed
  • Priority 2: Investment account, 15% of net pay
  • Priority 3: Checking account, blank (remainder)