Employee Payroll System

Prepared for prof. Mohammad Abdussami

SCHOOL OF Engineering & Technology

CSE 2nd year
SRM University AP,
Mangalagiri Mandal,
Guntur – 522502

Report By:
G.Samith– AP23110011498
U.Naveen – AP23110011502
V.Rohith – AP23110011508

DATE OF SUBMISSION: 15-04-25

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CONTENTS:
 Project BackgroundOverview of Employee Payroll System
1. Description of the Project

 Overview

 Objectives

 Database design

2. ER Diagram

 Description of ER diagram

3. Conversion of ER diagram into Tables

4. Description of Tables
5. Normalization of tables up to 3-NF
6. SQL Queries
7. Creation of views using the tables

PROJECT BACKGROUND

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Project Overview
The Employee Payroll System is a software application designed to automate and manage
the salary processing functions of an organization. It streamlines the entire payroll cycle —
from storing employee details, calculating monthly salaries, applying deductions and
allowances, to generating detailed payslips and payroll reports. The system reduces manual
workload and eliminates errors commonly associated with manual salary calculations.
This system allows HR and finance teams to manage employee records, compute net pay
based on predefined salary structures, and ensure timely and accurate payments. It supports
features such as HRA, DA, tax, provident fund deductions, bonuses, and leave-based salary
adjustments. Additionally, it provides secure role-based access to ensure that only authorized
users can modify sensitive payroll data.
Ideal for small to medium-sized businesses, the system enhances transparency, improves
efficiency, and ensures compliance with statutory requirements. With built-in reporting tools,
it also aids management in analyzing payroll expenses and making informed financial
decisions. The Employee Payroll System is a reliable, user-friendly, and scalable solution for
modern businesses aiming to simplify payroll management and improve employee
satisfaction.
.

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 Descrpiption of the Project
The Employee Payroll System project is a full-fledged software solution developed to
manage payroll processes of an organization in a streamlined and automated manner. The
project is developed using Python (or another tech stack like Java, PHP, or web frameworks
depending on scope), and aims to facilitate the HR and accounting departments by providing
a fast, reliable, and secure way to process employee payments.
System Architecture:
The system follows a modular architecture where different components (like employee
management, payroll calculation, and reporting) are organized into logical units, making the
system easy to maintain and scale.

Objective:
The primary objective of the Employee Payroll System is to automate the process of
calculating employee salaries, managing payroll data, and generating payslips accurately and
efficiently. This project aims to develop a software solution that can handle the payroll
functions of an organization, reducing manual errors and streamlining the HR and accounting
tasks associated with employee payments.
This system is designed to meet the needs of companies that want to:
 Maintain accurate records of employee salaries
 Calculate salary components such as HRA, DA, and deductions like PF and tax
 Improve the speed and accuracy of payroll processing
 Provide employees with detailed and transparent salary statements
 Ensure legal compliance by maintaining statutory deductions and payments
 Minimize human intervention in repetitive payroll calculations
 Enhance confidentiality and security of payroll data
 Enable scalable and modifiable structures that can support organizational growth
 Integrate attendance and leave systems for dynamic salary adjustments

Overview:
The Employee Payroll System is a software application designed to manage and streamline
the process of calculating and distributing salaries to employees within an organization. This
system is built to handle all aspects of payroll management — from capturing employee
details, computing salaries, managing deductions and allowances, to generating payslips and
reports.
In a traditional payroll setup, organizations manually calculate salaries, apply deductions, and
create payslips, which is not only time-consuming but prone to human errors. This system

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automates all these functions and ensures that calculations are accurate, consistent, and
transparent.
Key Modules in the System:
1. Employee Management Module
o Stores personal and professional details of employees
o Includes salary structures, job roles, department, and contact details
2. Salary Computation Module
o Calculates base salary, HRA, DA, bonuses, overtime, tax, PF, etc.
o Allows customization based on company policy or employee agreements
3. Payslip Generation Module
o Creates detailed digital or printable payslips
o Includes salary breakdown, bank details, and payment confirmation
4. Reporting Module
o Generates monthly, quarterly, and annual payroll reports
o Helps management in decision-making and financial planning
5. User Authentication and Access Control
o Ensures that only authorized users can access or modify payroll data
o Admins can create users and assign permissions
6. Integration Capabilities
o Can be connected with attendance and HR systems
o Capable of being extended to support direct bank transfers or third-party APIs

Database Design:
The Employee Payroll System database is structured to meet the rules of Third Normal
Form (3NF) to eliminate redundancy and ensure data integrity. The system consists of
several entities including Employee, Department, Qualification, Payroll, and Leave, each
serving a distinct role within the database.
1. Employee Table
The core of the system is the Employee table, which stores personal and employment-related
information such as employee ID, name, email, password, gender, age, and nationality. Each
employee is associated with a department and a qualification, represented by foreign keys
(department_id and qualification_id) linking to the Department and Qualification tables,
respectively. This design avoids duplicating department or qualification data for each
employee.

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2. Department Table
The Department table captures details about each department within the organization,
including its unique ID, name, description, and total number of staff. Instead of repeating
department details in the Employee table, this design maintains them separately and connects
via a foreign key.
3. Qualification Table
The Qualification table records academic or professional credentials associated with
employees. It includes attributes like grade, level, field, and university. Each employee
references one qualification via qualification_id. This separation allows multiple employees
to share the same qualification record, promoting normalization.
4. Payroll Table
The Payroll table tracks each employee’s salary details. It includes fields like salary, bonus,
leave deductions, and the total salary after deductions. The payroll_id is the primary key, and
it has a foreign key employee_id linking it to the Employee table. This ensures that each
payroll record is associated with a specific employee, and allows historical payroll tracking.
5. Leave Table
The Leave table manages employee leave records. It contains a unique leave ID, leave type
(e.g., sick leave, vacation), number of days taken, and a foreign key linking it to the
corresponding employee_id. This design supports multiple leave entries per employee, while
maintaining normalized data.

How This Design Satisfies 3NF

 First Normal Form (1NF): All attributes hold atomic values (e.g., age is a single
number, email is a single string).
 Second Normal Form (2NF): All non-key attributes are fully functionally dependent
on the primary key. For example, in the Payroll table, salary, bonus, and total depend
on payroll_id.
 Third Normal Form (3NF): No transitive dependencies exist — non-key attributes
are not dependent on other non-key attributes. For instance, department_name is not
stored in the Employee table; instead, it resides in the Department table and is
accessed via a foreign key.

This 3NF design ensures:

 Data consistency (no duplication of department or qualification info),
 Ease of updates (changing a department name happens in one place),
 Data integrity through use of foreign key constraints, and

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  Efficient queries for generating payroll reports, leave summaries, and employee
profiles.

Entity-Relationship
Diagram 7|Page
Description of ER diagram

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The ER (Entity-Relationship) diagram of the Employee Payroll System represents the logical
structure of how employee and payroll data is managed in an organization. It defines key
entities, their attributes, and the relationships between them to ensure efficient data storage,
processing, and retrieval.
At the center of the diagram is the Employee entity, which stores essential details such as
employee_id, emp_name, email, password, gender, age, and nationality. Each employee is
associated with a specific Department and a Qualification. The Department entity contains
attributes like department_id, department_name, description, and total_staffs, helping
categorize employees by their work units. The Qualification entity includes qualification_id,
grade, level, university, and field, describing the educational or professional background of
employees.
Payroll-related data is managed through the Payroll entity, which records financial
information such as salary, bonus, leave, and total, and is uniquely identified by payroll_id. It
is directly linked to each employee, ensuring that salary records are individualized and up-to-
date.
The Leave entity allows tracking of employee leave requests. It contains leave_id, type (e.g.,
sick, casual), and days, and is connected to the employee through a relationship indicating
that an employee may apply for multiple leaves.
The relationships between entities are clearly defined: an employee belongs to one
department and has one qualification, but can have multiple payroll and leave entries. This
one-to-many and one-to-one relationship structure ensures data normalization and avoids
redundancy.
Overall, this ER diagram provides a clear blueprint for developing a relational database
system that supports payroll processing, HR management, and employee data organization in
a structured and efficient manner.
.

Conversion of ER diagram into Tables

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Employee Table
Attributes: employee_id, emp_name, email, password, gender, age, nationality,
department_id
Department Table
Attributes: department_id, department_name, description, total_staffs
Payroll Table
Attributes: payroll_id, employee_id, salary, bonus, leave, total
Leave Table
Attributes: leave_id, employee_id, type, days
Qualification Table
Attributes: qualification_id, employee_id, grade, level, university, field

Description of Tables:

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Employee Table
Attribute Description

employee_id Unique identifier for each employee (Primary Key).

emp_name Full name of the employee.

email Official email address used for communication.

password Encrypted password for login/authentication.

gender Gender of the employee (e.g., Male, Female, Other).

age Age of the employee.

nationality Nationality of the employee.

References the department where the employee works (Foreign Key to

department_id
Department).

Department Table
Attribute Description

department_id Unique identifier for each department (Primary Key).

department_name Name of the department (e.g., HR, Finance, IT).

description A brief about the department’s role/functions.

total_staffs Total number of staff working in that department.

Payroll Table
Attribute Description

payroll_id Unique identifier for each payroll record (Primary Key).

employee_id ID of the employee being paid (Foreign Key to Employee).

salary Base salary amount.

bonus Any additional bonus included in the salary.

leave Number of paid/unpaid leave days taken.

total Final payable amount (salary + bonus - deductions).

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Leave Table
Attribute Description

leave_id Unique identifier for each leave application (Primary Key).

employee_id Employee requesting the leave (Foreign Key to Employee).

type Type of leave (e.g., Sick, Casual, Maternity).

days Number of days leave is taken/applied for.

Qualification Table
Attribute Description

qualification_id Unique ID for each qualification entry (Primary Key).

employee_id Employee who holds the qualification (Foreign Key to Employee).

grade Grade or score obtained.

level Level of education (e.g., Bachelor's, Master's, Diploma).

university Name of the institution that awarded the qualification.

field Area of study (e.g., Computer Science, Finance, HR).

Normalization of Tables upto 3NF

1. Normalized Employee Table
Attributes: employee id, emp name, email, password, gender, age, nationality, department
id (Foreign Key)
2. Normalized Department Table
Attributes: department id, department _name, description

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3. Normalized Payroll Table
Attributes: payroll id, employee id (Foreign Key), salary, bonus, leave days, total salary
4. Normalized Leave Table
Attributes: leave_ id, employee_ id (Foreign Key), leave_ type, days
5. Normalized Qualification Table
Attributes: qualification _id, employee _id (Foreign Key), grade, education_ level, university
_id (Foreign Key), field
6. Normalized University Table
Attributes: university_ id, university_ name, location
7. Normalized Leave_ Type Table (Optional normalization)
Attributes: leave _type_ id, leave_ type_ name

SQL Queries
JOINS
1. List employees with their department names
SELECT e.emp_name, d.department_name
FROM Employee e
JOIN Department d ON e.department_id = d.department_id;

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-- 2. Get payroll details with employee names
SELECT e.emp_name, p.salary, p.bonus, p.total_salary
FROM Employee e
JOIN Payroll p ON e.employee_id = p.employee_id;

-- 3. Fetch all leave records with employee names

SELECT e.emp_name, l.leave_type, l.days
FROM Leave l
JOIN Employee e ON l.employee_id = e.employee_id;

-- 4. Show qualifications along with the university name

SELECT e.emp_name, q.grade, q.education_level, u.university_name
FROM Qualification q
JOIN Employee e ON q.employee_id = e.employee_id
JOIN University u ON q.university_id = u.university_id;

-- 5. Employees and their departments who have taken leave

SELECT DISTINCT e.emp_name, d.department_name
FROM Employee e
JOIN Department d ON e.department_id = d.department_id
JOIN Leave l ON e.employee_id = l.employee_id;

AGGREGATE FUNCTIONS
1. Total salary paid to all employees
SELECT SUM(total_salary) AS Total_Paid
FROM Payroll;

-- 2. Average salary across all departments

SELECT AVG(salary) AS Average_Salary

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FROM Payroll;

-- 3. Maximum bonus given

SELECT MAX(bonus) AS Max_Bonus
FROM Payroll;

-- 4. Total number of leave days taken by employees

SELECT SUM(days) AS Total_Leave_Days
FROM Leave;

-- 5. Count of employees with qualifications

SELECT COUNT(DISTINCT employee_id) AS Qualified_Employees
FROM Qualification;

GROUPING
1. Total payroll per department
SELECT d.department_name, SUM(p.total_salary) AS Dept_Total_Pay
FROM Payroll p
JOIN Employee e ON p.employee_id = e.employee_id
JOIN Department d ON e.department_id = d.department_id
GROUP BY d.department_name;

2. Number of employees per department

SELECT d.department_name, COUNT(e.employee_id) AS Num_Employees
FROM Department d
JOIN Employee e ON d.department_id = e.department_id
GROUP BY d.department_name;

-- 3. Total leave days by leave type

SELECT leave_type, SUM(days) AS Total_Days

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FROM Leave
GROUP BY leave_type;

-- 4. Count of qualifications per education level

SELECT education_level, COUNT(*) AS Qualification_Count
FROM Qualification
GROUP BY education_level;

-- 5. Average bonus per department

SELECT d.department_name, AVG(p.bonus) AS Avg_Bonus
FROM Payroll p
JOIN Employee e ON p.employee_id = e.employee_id
JOIN Department d ON e.department_id = d.department_id
GROUP BY d.department_name;

Creation of VIEWS

1. View: View_Employee_Payroll
Purpose: Shows payroll info with employee details.
sql
CREATE VIEW View_Employee_Payroll AS

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SELECT
e.employee_id,
e.emp_name,
e.gender,
e.age,
d.department_name,
p.salary,
p.bonus,
p.leave_days,
p.total_salary
FROM Employee e
JOIN Payroll p ON e.employee_id = p.employee_id
JOIN Department d ON e.department_id = d.department_id;

2. View: View_Leave_Summary
Purpose: Summary of leave taken by employees.
CREATE VIEW View_Leave_Summary AS
SELECT
e.employee_id,
e.emp_name,
l.leave_type,
SUM(l.days) AS total_leave_days
FROM Employee e
JOIN Leave l ON e.employee_id = l.employee_id
GROUP BY e.employee_id, e.emp_name, l.leave_type;

3. View: View_Qualified_Employees
Purpose: Employees with their qualifications and university info.
CREATE VIEW View_Qualified_Employees AS
SELECT
e.employee_id,

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 e.emp_name,
q.education_level,
q.grade,
q.field,
u.university_name
FROM Employee e
JOIN Qualification q ON e.employee_id = q.employee_id
JOIN University u ON q.university_id = u.university_id;

4. View: View_Department_Stats
Purpose: Employee count and total salary per department.
CREATE VIEW View_Department_Stats AS
SELECT
d.department_id,
d.department_name,
COUNT(e.employee_id) AS total_employees,
SUM(p.total_salary) AS total_salary_paid
FROM Department d
JOIN Employee e ON d.department_id = e.department_id
JOIN Payroll p ON e.employee_id = p.employee_id
GROUP BY d.department_id, d.department_name;

5. View: View_Employee_Leave_Percentage
Purpose: Calculates percentage of leave taken (bonus: for analytics).
CREATE VIEW View_Employee_Leave_Percentage AS
SELECT
e.employee_id,
e.emp_name,
p.leave_days,
p.salary,

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 ROUND((p.leave_days / 30.0) * 100, 2) AS leave_percentage -- Assuming 30-day month
FROM Employee e
JOIN Payroll p ON e.employee_id = p.employee_id;

References:
1. Silberschatz, A., Korth, H. F., & Sudarshan, S. (2019). Database System Concepts
(7th ed.). McGraw-Hill Education.
2. Elmasri, R., & Navathe, S. B. (2015). Fundamentals of Database Systems (7th ed.).
Pearson Education.
3. Rob, P., & Coronel, C. (2007). Database Systems: Design, Implementation, and
Management. Cengage Learning.

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4. W3Schools. (2024). SQL Tutorial. Retrieved from https://www.w3schools.com
5. TutorialsPoint. (2024). DBMS - Entity Relationship Model. Retrieved from
https://www.tutorialspoint.com
6. GeeksforGeeks. (2024). SQL Joins and Queries. Retrieved from
https://www.geeksforgeeks.org
7. Oracle SQL Documentation. (2024). Retrieved from
https://docs.oracle.com/en/database/
8. Stack Overflow. (2024). Community-based help on SQL syntax and relational queries.
https://stackoverflow.com/
9. DatabaseStar. (2024). SQL GROUP BY Tutorial
10. MySQL Documentation (2024). MySQL 8.0 Reference Manual
11. YouTube – The Net Ninja. (2024). SQL & Database Design Full Course – Learn how
to design a database.
12. IBM Cloud Docs. (2024). Database Normalization: 1NF, 2NF, 3NF
13. Lucidchart. (2024). ER Diagram Tool & Examples
14. DBDesigner & DrawSQL. (2024). Used for designing and visualizing the ER
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15. Personal Experience and Faculty Guidance (2024). Practical application and
conceptual validation from classroom and project development work.

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