---
title: "Flexible Benefits"
space: "Frappe HR"
url: "https://docs.frappe.io/hr/employee-flexible-benefits"
updated: "2026-02-04"
---

# Employee Benefits in HRMS

**Flexible benefit** plans allow employees to avail the **benefits** they want or need from a package of programs offered by an employer. They may include health insurance, pension plans, telephone expenses, etc.

 
To set Flexible Benefits in Frappe HR, follow the following steps:

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## Types of Benefits
Once **Is Flexible Benefit** is enabled for a salary component, user can choose how to pay it out based on following scenarios:

1. **Accrue and payout at end of payroll period**

   * The benefit amount accrues each payroll cycle and is fully paid out in the final cycle.

2. **Accrue per cycle, pay only on claim**

   * The benefit accrues each cycle but is paid only when the employee submits an **Employee Benefit Claim**.
   * Payout is processed via Additional Salary.
   * *Optional:* Any unclaimed accrued balance can be auto-paid in the final cycle by enabling **Payout Unclaimed Amount in Final Payroll Cycle**.


3. **Allow claim up to the full period limit**

   * The employee can claim the entire annual benefit in one go. No accruals are created.

> **Note:** If *Depends on Payment Days* is enabled for a component, the monthly entitlement will be adjusted accordingly.

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## Assigning Employee Benefits to Employees

* Configure employee benefits and their yearly amount in the **Salary Structure**. This acts as the template for employee benefits.
* When a Salary Structure is assigned to an employee, these details are copied into the **Salary Structure Assignment** and can be edited further if required.
* The final list and amounts in the Salary Structure Assignment are what the system considers.

![](/files/Screenshot%202025-09-18%20at%208.42.25%E2%80%AFPM.png)
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## Employee Benefit Application

* Employees can opt for the benefits they want from those assigned in their Salary Structure Assignment.
* If no Benefit Application exists, the system falls back to the Salary Structure Assignment.
* To make a Benefit Application mandatory, enable **Mandatory Benefit Application** in Payroll Settings.

<img width="956" height="358" alt="Screenshot 2025-09-18 at 3 43 12 PM" src="https://github.com/user-attachments/assets/a3938f4f-2ac5-4f75-889b-4672f0d73dbe">

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## Employee Benefit Ledger

* In the Salary Slip:

  * **Accrued Benefits** appear in the *Accrued Benefits* table.
  * **Payouts** appear as *Earnings*.
  * 
![](/files/Screenshot%202025-09-18%20at%208.44.32%E2%80%AFPM.png)

* After salary is processed, a **Benefit Ledger Entry** is created for every accrual and payout to keep track of balances.

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## Employee Benefit Claim

Claims can be submitted only for these payout types:

* **Accrue per cycle, pay only on claim**

  * Claim limit = Total accrued so far + Current month’s entitlement
* **Allow claim up to the full period limit**

  * Claim limit = Total assigned amount

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## Accrual Component in Salary Component

A new checkbox **Accrual Component** is available in the *Salary Component* doctype.

**Example use case:**

* HR wants to record a **Loyalty Bonus** equal to 5% of basic salary every month and pay it out after 10 months.
* Create a Salary Component *Loyalty Bonus*, enable **Accrual Component**, and add it to the Salary Structure with a formula.
* This accrual will:

  * Show in the salary slip as *Accrued Earnings*.
  * Not be included in gross pay or accounting entries.
  * Create an **Employee Benefit Ledger** entry for tracking.
* At the end of 10 months, the employer can create an *Additional Salary* for the accrued amount, which will then flow into gross pay, accounting, and tax calculations.

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## Accrued Earnings Report

A report to track total accruals and payouts.

* For standard accruals, users can create an Additional Salary for pending payouts directly.
* For flexible benefits, payouts must be done via an **Employee Benefit Claim**.

![](/files/Screenshot%202025-09-18%20at%208.48.27%E2%80%AFPM.png)