payroll compliances

 

PAYROLL COMPLIANCE

Payroll mistakes can happen faster than you think. For a moment, think about the employees for whom monthly salary is the only source of income. Imagine what if the salary is not paid accurately or there is a delay in releasing salary. Such irregularities can take a toll on the morale of the employees and ultimately affect the business productivity.
While ensuring accurate and timely payment of salary is important, adhering to the various laws and regulations such as labor law, PF, PT and other statutory compliance is also critical. Non-adherence with these laws can attract serious legal and financial consequences.
To make sure that your employees are happy and you are law compliant, you need to have a proper understanding of what payroll is and how to run payroll effectively. We will start with the basics of payroll.

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Payroll Process:

Payroll is a list of employees who get paid by the company. Payroll also refers to the total amount of money employer pays to the employees. As a business function, it involves:

  1.  Developing organization pay policy including flexible benefits, leave encashment policy, holiday policies and attendance policies,etc.
  2. Defining payslip components like basic, variable pay, HRA, LTA and other incentive.
  3. Gathering other payroll inputs (e.g., organization’s bus vendor may supply information about the amount to be recovered from the employees for trips done in the month)
  4. The actual calculation of gross salary, statutory and non-statutory deductions, extra additions and arriving at the net pay
  5. Releasing employee salary
  6. Depositing the PT, PF, ESIC & other statutory dues at regular intervals to the government.

Process will be divided between Pre and Post payroll process which is as below:

Pre – Payroll Processing:

1. Defining payroll policy
2. Gathering input
3. Input validation
4. Payroll calculation

Post Payroll Processing

5. Statutory compliance
6. Payroll accounting
7. Payout
8. Reporting

Advantages

Free up your time:

Payroll Processing is indeed a brain storming process. Outsourcing payroll can free up staff to pursue other important value added and revenue generating activities.

Trim costs:

The direct costs of payroll processing can be greatly reduced by working with an efficient payroll provider. Moreover, cost saving for the company on outsourcing payroll processing is extremely significant and it can go up to 500% at times also

Avoid penalties

By outsourcing payroll, you can free yourself from worrying about fines and penalties. It is believed that nearly 40% of businesses pay penalties due to late or incorrect fillings. But this unwanted situation can be avoided by availing the services of a payroll provider as many payroll outsourcing companies also give a tax guarantee and they make sure that you do not need to pay any fine. For this reason alone, it is justify to outsource payroll.

More time to pay attention towards core issues:

Management can now focus more on dealing with pivotal business issues instead of the nitty gritty issues. This in turn helps in saving time and energy which can be utilized for better use

Curtail risk potential

Doing payroll on your own is indeed a risk process as along with your core issues, you need to take care of other confusing aspects of payroll also, like updating tax tables, submitting reports and making payments. This diverts the attention from important work and at the same increases the change of occurrence of mistakes. But by outsourcing payroll, you can free yourself from such woes.

Walkouts doesn’t panic anymore

Losing an employee who does the payroll to a new employer is no longer a big deal if you outsource your payroll system

Expert service

Only a call away Outsource payroll experts are always available at your beck and call, so you don’t need to keep a close watch on the constantly changing rules. Also, you are now free from updating your latest payroll software.

Attenuate pain

Manual payroll is a headache and many times becomes a nightmare in the worst case. Business owners who outsource payroll curtail a tiresome source of personal pain

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