“Payroll management services constitutes one of the most important functions of any organisation. It involves much more than the payment of salaries to the employees. Payroll management services in a private or public enterprises are the responsibility of the specific company”.
A payroll compliance is a comprehensive term that can be described as procedures adopted to record, classify, summarize data pertaining to human resource of the company and prepare desired reports in compliance with legal as well as management requirement. It is worked out on the basis of all the relevant data collected and further analysed to arrive at the correct transaction figures.
The timely, accurate and smooth execution of the payroll processing ensures job satisfaction and confidence among the employees. It boosts their integrity and loyalty.
Erratic and unreliable payroll management services, on the other hand, create a negative impact on the productivity of the staff. Thus, in turn, will affect the reputation and stability of the company.
Payroll processing is a complex and time consuming activity and demands careful planning and execution. Human resource being the most crucial resource for any organization requires specific look after this area.
The organizations are left with 02 options either:
- a.) Set up its own HR department which will look after the entire payroll processing aspect or
- b.) Outsource payroll processing assignment.
Setting up own HR department not only requires huge investment but also finding suitable candidate for the same is cumbersome process sometime.
On contrary, if organizations outsource the payroll processing assignment then, it will not only costs it less comparatively but expertise will also be involved there.
We, at India Paramarsh, ensures timely and accurately processing of all the Payroll services.
Services under Payroll Management
Documentation & Records
- Issuance of appointment letter & completion of other joining formalities:
An employee appointment letter is the document that is given to an employee after he/she has already accepted the company’s job letter.
Apart from that, there are few formalities and documentation process which is to done by a payroll processing company.
- Previous Employment Check and Verification of ID and Address:
Previous employment check of an employee will verify an applicant’s previous employment work’s history and experience. This is an excellent opportunity where a company learn more about an applicant and their previous work history can help a company to identify if they would be an asset to the company.
Similarly, verification of ID and address confirms that the credentials shared by the applicant is true and the applicant actually resides in that particular address
- Creation of employee code:
Employee code is an identification code assigned to the employee to identify hism/her using the unique number that is assigned to them. The employee code applies to every employee of the company including directors, managers, and employees.
- Employee registration in ESI/ PF:
Every organization, at some stage, has tomust register for PF/ESI. Registration for PF/ESI is mandatory for the companies / organizations who employ a prescribed limit of individuals employees.
- Nomination forms of ESI, PF and Gratuity:
A nomination form is also to be filed stating the name of the nominee of the employees. The form is to be filed at the portal of ESI/PF.
- Salary calculations based on monthly attendance:
The salary of the employee shall be calculated on the basis of his/her attendance which is to be calculated monthly. A combined salary and attendance sheet shall be maintained to calculate month wise salary of all the employees.
- Investment Declaration & Proof Verification:
Every company is responsible to compute and deduct accurate tax from their employees and deposit it in timely manner, every employee need to declare their proposed investment for the financial year and submit their proof at the end of financial year, company need to compute tax based on employee’s investment declaration at the beginning of financial year and deduct average tax every month.
- Leave adjustment:
Every company entitle casual leaves / privilege leaves to the employees, if any employee takes leave beyond their limit the same need to be deduct from their salaries. We will keep a record as per the company policies and take care of deduction if required.Every company is responsible to compute and deduct accurate tax from their employees and deposit it in timely manner, every employee need to declare their proposed investment for the financial year and submit their proof at the end of financial year, company need to compute tax based on employee’s investment declaration at the beginning of financial year and deduct average tax every month.
- Processing of salary/ Payroll processing:
At the end of every month, processing of salary is to be done by crediting the amount of net pay into the account of employee.
- Monthly pay slip, Tax Slip, Reimbursement Slips:
A pay slip/salary slip is a document issued by an employer to an employee. . It contains a detailed description of the employee’s salary components like Basic, HRA, LTA and bonus paid etc. and deductions like EPF, ESIC etc., a separate and reimbursements slip also be issued for payment of allowance for every month.
- Maintain Payment Register:
A payment register is a register containing break up wise details of all employees, this is an important document for any future reference during in labour inspection, audit etc.
- Payment of gratuity as per payment of Gratuity Act
Every company need to comply with payment of gratuity act at the time of employee leaving the company.
Gratuity is a retirement benefit and is applicable to employee after completing 5 years’ service with the company.
- Calculation of amount of loan, EMI, Interest on loan – periodically:
If a company provides a loan facility to its employees, then EMI should be deducted automatically in employee’s salary every month.
If the loan facility is on discounted interest rate or without any interest, then it is a perquisite to an employee and as per Income Tax Act company needs to deduct TDS on such perquisite from employees.
- Reimbursement of expense/medical /LTA etc.:
There are following types of expense which can be reimbursed from an employer:
People who are earning income from Salary , the certificate in Form 16, and Form 12BA is required to be provided by their employer which includes the details about their salary, tax deducted at source (TDS) as well as perquisites by their employer.
- TDS Returns- Deduction and Submission:
As per the rule of Income Tax, company need to deduct average tax every month at the time of making payment to employees and the same needs to be deposited by 7th in the following month.
If TDS is not deposited with the Income Tax department on time, Company is liable to deposit it with interest and penalty.
Every company needs to submit quarterly TDS return giving employee’s wise details of their salary earned and TDS deduction there on. If TDS return not filled by the company, it will result into a mismatch in Forms 16 and 26AS which will cause employee dissatisfaction.
Further, delayed filing of TDS returns will increase the burden of interest, penalties and fine.Therefore, it is the employer’s responsibility to make sure that all such compliances should be completed on time.
- Professional tax calculations:
Every State has a liberty to charge professional tax and company is liable to deductsuchtax from employees and deposited it to State treasury.Since, this tax is on employment hence this needs to be deducted from the employee’s salary.Few of States have applied professional tax, therefore, it is the responsibility of the company to check the applicability and comply accordingly.
Labour law Compliance
Provident Fund Compliance – filing of various monthly and annual returns to PF Department:
Provident Fund(PF) is a compulsory contributory fund for the future of employees. It works as a corpus fund generated through regular and monthly contributions made by an employee and his employer as well.
All employers having PF registration are responsible to file returns on a monthly basis. The filing of returns must be completed by the 15th of each month.
There are also certain forms which have to filed monthly or quarterly on EPFO Portal.
Employee State Insurance is a self-financing social security scheme in India. It is basically a fund where employer and employee both contribute a certain percentage of salary to obtain the facilities provided by ESI Corporation.
ESI was originally applicable for factories that employed ten or more persons. Subsequently, the coverage of ESI scheme has been expanded.
Currently, any factory or establishment employing ten or more persons drawing wages of up to Rs.21,000 per month must obtain ESI registration.
Presently, Government of India introduced a platform where a Common Registration can be obtained for EPFO & ESIC at Unified Shram Suvidha Portal.
Minimum wages compliance:
As per the provisions of Minimum Wages Act, all the organizations in India need to pay specified minimum wages to specified category of labour/ Employee, as notified by the Labour Law department, from time to time.
Thus, it is mandatory for the Employers to pay the minimum wages fixed under the Minimum Wages Act.
Both the Central Government and State Government has the authority to review and fix Minimum wages, along with enforcing the rules to the Employers operating under their jurisdiction.
There are certain compliances (like maintenance of wage register, preparation and distribution of wage slip, preparation of annual return in prescribed form) related to minimum wages which needs to be followed periodically.
Payment of Bonus Compliance
Every employee getting monthly salary up to 21000/month are eligible to get bonus every year. Therefore, every company needs to identify the eligible employees and pay them bonus as per payment of bonus Act.
Every company needs to file certain annual returns under payment of minimum wages, payment of gratuity, maternity benefits etc., under labour law.
Therefore, companies needs to identify their annual return and submit on time to comply with requirement.
Preparation of various challans:
There are various challans which are to related to Income tax, TDS, GST, PF, ESI, etc. which are required to be generated before filing any return.
Various Reports Generation- MIS and Others Report – as per client requirement:
MIS stands for Management Information System.
Business managers at all levels of an organization, from assistant managers to executives, rely on reports generated from these systems to help them evaluate their daily business activities or problems that arise, make decisions, and track progress.