odoo-hr-payroll-setup

name	odoo-hr-payroll-setup
description	ALWAYS use this when the request matches Odoo HR Payroll Setup: Expert guide for Odoo HR and Payroll: salary structures, payslip rules, leave policies, employee contracts, and payroll journal entries.

Odoo HR & Payroll Setup

Selective Reading Rule

Start with:

• references/senior-master-standard.md
• references/usage-routing.md
• references/quality-checklist.md

Then load only the inherited docs, scripts, assets, or examples that match the user's actual task.

Overview

This skill guides HR managers and payroll accountants through setting up Odoo HR and Payroll correctly. It covers salary structure creation with Python-computed rules, time-off policies, employee contract types, and the payroll → accounting journal posting flow.

When to Use This Skill

• Creating a salary structure with gross pay, deductions, and net pay.
• Configuring annual leave, sick leave, and public holiday policies.
• Troubleshooting incorrect payslip amounts or missing rule contributions.
• Setting up the payroll journal to correctly post to accounting.

How It Works

1. Activate: Mention @odoo-hr-payroll-setup and describe your payroll scenario.
2. Configure: Receive step-by-step setup for salary rules and leave allocation.
3. Debug: Paste a salary rule or payslip issue and receive a root cause analysis.

Examples

Example 1: Salary Structure with Deductions

Menu: Payroll → Configuration → Salary Structures → New

Name: US Employee Monthly
Payslip Code: MONTHLY

Rules (executed top-to-bottom — order matters):
  Code  | Name                   | Formula                        | Category
  ----- | ---------------------- | ------------------------------ | ---------
  BASIC | Basic Wage             | contract.wage                  | Basic
  GROSS | Gross                  | BASIC                          | Gross
  SS    | Social Security (6.2%) | -GROSS * 0.062                 | Deduction
  MED   | Medicare (1.45%)       | -GROSS * 0.0145                | Deduction
  FIT   | Federal Income Tax     | -GROSS * inputs.FIT_RATE.amount| Deduction
  NET   | Net Salary             | GROSS + SS + MED + FIT         | Net

Federal Income Tax: The standard Odoo US localization does not expose a single l10n_us_w4_rate field. Use an input (salary input type) to pass the withholding rate per employee, or install a community US payroll module (OCA l10n_us_hr_payroll) which handles W4 filing status properly.

Example 2: Configure a Time Off Type

Menu: Time Off → Configuration → Time Off Types → New

Name: Annual Leave / PTO
Approval: Time Off Officer
Leave Validation: Time Off Officer  (single approver)
  or: "Both" for HR + Manager double approval

Allocation:
  ☑ Employees can allocate time off themselves
  Requires approval: No

Negative Balance: Not allowed (employees cannot go negative)

Then create initial allocations:
Menu: Time Off → Managers → Allocations → New
  Employee: [Each employee]
  Time Off Type: Annual Leave / PTO
  Allocation: 15 days
  Validity: Jan 1 – Dec 31 [current year]

Example 3: Payroll Journal Entry Result

After validating a payroll batch, Odoo generates:

Debit   Salary Expense Account     $5,000.00
  Credit  Social Security Payable     $310.00
  Credit  Medicare Payable             $72.50
  Credit  Federal Tax Payable         (varies)
  Credit  Salary Payable           $4,617.50+

When net salary is paid:
Debit   Salary Payable            $4,617.50
  Credit  Bank Account              $4,617.50

Employer taxes (e.g., FUTA, SUTA) post as separate journal entries.

Best Practices

• ✅ Do: Install your country's payroll localization (l10n_us_hr_payroll, l10n_mx_hr_payroll, etc.) before building custom rules — it provides pre-configured tax structures.
• ✅ Do: Use salary rule inputs (inputs.ALLOWANCE.amount) to pass variable values (bonuses, allowances, withholding rates) rather than hardcoding them in the rule formula.
• ✅ Do: Archive old salary structures rather than deleting them — active payslips reference their structure and will break if the structure is deleted.
• ✅ Do: Always set an active Employee Contract with correct dates and salary before generating payslips.
• ❌ Don't: Manually edit posted payslips — cancel and regenerate the payslip batch if corrections are needed.
• ❌ Don't: Use contract.wage in deduction rules without verifying whether the structure is monthly or annual — always check the contract wage period.

Limitations

• Odoo Payroll is Enterprise-only — the Community Edition does not include the Payroll module (hr_payroll).
• US-specific compliance (W2, 941, state SUI/SDI filing) requires additional modules beyond the base localization; Odoo does not generate tax filings directly.
• Does not cover multi-country payroll (employees in different countries require separate structures and localizations).
• Expense reimbursements via payslip (e.g., mileage, home office) require a custom salary rule input and are not covered in standard HR Payroll documentation.