When you first started your business, you had this great idea in
mind, or you just had the will to have something of your own. Hence, you picked
the best industry you know in and started.
The first and second month was great. You got a few clients, and
you were happy to cater to their needs through freelancers. However,
eventually, your work grew, you started getting more and more work, so much so
that your freelancing team was not enough.
Just like that, all of a sudden, you had to face the
responsibility of hiring employees, managing them, offering them hike,
providing them incentives, etc.
This
seemed like an easy task at first, but with time, it started getting more and
more complicated. You were trapped in between multiple responsibilities –
dispatching salaries on time and taking business decisions. At the end of every
month, you had to stay in the office till 10 or 11 PM to complete payroll.
The primary purpose of a payroll department of any company is to ensure
that their employees receive their salaries on time with the correct deductions
and necessary withholdings. The said department also has the responsibility of
remitting any of the withholdings or deductions of
employees. This is basically done to develop and maintain good and healthy
employee relations and to promote the growth of the company.
Objective of the Payroll
The payroll management system is a set of processes that helps you
streamline salaries, bonuses, deductions, taxes, and other necessary aspects of
the net pay of all the employees in your organization.
There are two primary objectives of the payroll management system in India. One is the macro
objective, which is related to sales, strategy, revenue, etc. Another is micro,
which is associated with the daily tasks of the business.
The aim behind having a payroll management system is to automate and streamline micro
tasks such that the HR team has time to focus on the macro tasks.
You don’t have to worry
about handling, managing, and creating payslips, salaries, and deductions of
the employees. The tax deductions are also automated or handled by the
outsourcing team. You only have to focus on major tasks such as the efficiency
of sales, revenue, strategy, etc.
Stages of Payroll India
1)Gather Information
To process payroll india of the employees of the organization, collect data. You need
to know the time every employee has worked for, including full-day, half-day,
paid leaves, short-leaves, etc. You can also capture this data directly from
the biometric payroll management system.
If you are not using an automated system for payroll, you may have
to spend some time collecting this data from manual sheets.
If the data is manually captured, it is necessary to thoroughly
verify the data to understand if everything is up to the mark. For example, you
may have accidentally placed the leave of an employee in someone else’s column
in the Excel sheet. So, you are required to cross-verify every entry with the
leave applications, etc.
This is a hassle, which is why outsourced payroll
management in India can be utilized.
2) Calculate Now, this task also depends on the help you have. If you are using
an automated payroll calculation system, then you can feed the above data to
the system. But, if you have to calculate payroll manually, you need to spend
some (Read: A lot) of time on the calculations.
You have to count the hours of the normal work cycle of the
employee as per their attendance. These hours are charged as per the normal pay
scale of each employee.
Then, you need to bifurcate the hours of overtime because those
are usually paid separately with hiked pay. Most of the organizations pay
double salary for the overtime. However, it depends on the position as well. If
the employee is in a managerial position, then they may not receive overtime
for a certain amount of hours. So, you have to consider that as well in the
calculations.
Overtime is usually calculated with the gross pay of the employee
rather than net pay. Hence, you need to calculate that further to move forward.
Lastly, remove deductions
from this pay such as PF, ESI, TDS, etc. This step is essential because it is
linked to several compliance regulations. If you don’t submit the PF but deduct
it, you can not only suffer fines but also lose your reputation in front of
employees.
3) Pay
The final step of the payroll India process
is to pay the employee. Send the payment electronically, schedule it, or visit
the bank and transfer it before the salary day. Don’t leave this task for the
end day as various circumstances can cause a delay in the payments of employees
Payroll Process Documentation and Standardization in Bangalore Introduction Brief overview of the importance of payroll process documentation and standardization. Introduction to the significance of Bangalore as a hub for IT and corporate operations. ...
The term social audit has been frequently in news. Few Years ago, a Parliamentary Standing Committee on Rural Development had recommended strengthening of comprehensive Grievance Redressal Mechanism, Social Audit from grassroots with periodic reviews ...
Payroll management is an essential function of every organization. Getting the right payroll is vital for a growing business. Payroll, essentially, is what you pay your employees for the work they do for your organization. It includes the ...
The term “Payroll” actually refers to the list of employees that receive compensation from a company. However, most companies generally use the term to refer to the money that is paid to the employees or the records that detail how much each employee ...
Definition The definition of a payroll (compliance) audit is to determine through the review of the payroll records that the employer is in compliance with the terms of the Collective Bargaining Agreement with regard to the employer’s contributions ...