Overview

Payroll is a list of employees that are paid by the company. Payroll is the total amount the employers pay to the employees. A payroll function involves the development of an organization pay policy that includes flexible benefits, leave encashment policy.

Payroll management also includes payslip components like basic, variable pay, HRA, and LTA. and also gathering other payroll inputs like the organization's food vendor supply, etc.

Payroll and HR management also involve releasing the employees' salary, depositing the dues like TDS, PF, etc with appropriate authorities, and filing returns.

Put together Payroll processing includes the calculation of the Net Pay after the tax adjustments and other deductions.

Get Started to Manage Your Payroll

Checklist for Payroll Processing & Management

Company Documents:
1. Certificate of Registration
2. Electronic Challan cum Return (ECR) document
3. Company GST and TIN.
Payment Schedule:

A flexible and fixed schedule:
1. Weekly
2. Bi-weekly
3. Semi-monthly and
4. Monthly payroll schedules.

Classify Employees:
Classify employees on the basis of
1. Contractors
2. Freelancers
3. Permanent employees
4. Interns and
5. Schedule payments accordingly.

Terms of Compensation:
To keep a tab on
Employee hours
Office timings
Overtime, etc.

Post- Payroll
Statutory compliance:
The payroll administrator needs to religiously adhere to statutory compliance. There are various statutory deductions like EPF, TDS, ESI is deducted during the payroll processing.
These deductions are then paid to the respective authorities or government bodies.

Payroll accounting:
Every organization is required to maintain an accurate book of accounts and the salary that is paid for one of the significant entries in the books of accounts.

Payout:
After complying with the steps above the salaries can be finally paid in cash or cheque or via bank transfers. For hassle-free transfers, it is better to have salary accounts of the employees.

Report:
Preparing a report is the last stage and it is necessary to prepare an accurate report containing information such as the department or location-wise employee cost.

Benefits of Payroll Management

Here are some of the benefits of our complete payroll management system:

• Improve employee morale:
  If your employees believe their position is unstable and they are not paid on time, they may begin to hunt for work elsewhere. A Payroll Management system will take care of any last-minute difficulties or manual errors, ensuring that your employees' morale remains high.
• Lower tax bills:
  Managing all of your employees' records can be difficult and mishandling them can prove to be a nightmare. Throw in compliance issues to the mix and you might find yourself paying fines if you aren't very careful about all of this.
• Easy tax filing and reporting:
  Payroll software prevents tax mismanagement, which could result in penalties for employees. It also handles all of the company's compliance and legislative needs, making tax filing a breeze.
• Beneficial to new startup owners:
  As a new startup owner, you will already have too many things going on. Instead of adding payroll management to your list of tasks, you can now manage your company's finances with established management software.
• Economical and time-saving:
  Payroll software is typically designed to work with an existing accounting system. This saves time and money for companies when calculating large volumes of data. Rather than outsourcing your payroll, keeping it in-house will save you a lot of money. You'll also have more control over your finances.

Methods of Payroll Management

Excel-based payroll management:
At the initial stage of operations and when a company has a handful of employees they opt for excel based payroll management. In excel based payroll management the calculation is done on excel sheets using the standard payroll calculation template. The already set mathematical formulas help the payroll officer to do the computation. But this method has many errors like
1. High chances of clerical and mathematical errors as the data are entered manually
2. Difficulty in adding and removing employees from the payroll list
3. Chances of duplicate data and omission of entries at times
4. Need to monitor the tax updates and other statutory changes like the PF, PT, etc.

Outsourcing Payroll:
When the payroll is outsourced an external agency is taking care of the payroll function. The payroll service provider based on the pay cycle every month provides various other data such as the attendance, leaves, and reimbursement details. The external service provider then computes the payroll and takes care of the statutory compliance. Since payroll is a crucial function Filemydoc.com can help you comply with all the needs.

Challenges in Payroll Management

• The requirement of statutory compliance:
  Non-adherence to the statutory laws can lead to a penalty of fines and in the worst case, it will even threaten the existence of the business. However, when you register with Filemydoc.com you automatically process payroll in compliance with the statutory laws.
• Dependence on multiple payroll input sources:
  Before the payroll is processed it is necessary to get all the data together from varied sources like the attendance register conveyance facility availed record, data from the HR team like salary revision information, etc. making it a tedious process.
  For years the HR and payroll managers managed the payroll on excel sheets but excel sheets have problems like dependency on excel formulas for calculation of salary, complexity in adding and removing the employees, and other limitations like manual data entry, and difficulty in extracting information.

Management of Payroll

At Filemydoc.com, our chartered accountants and accounting & taxation experts will take care of your end-to-end payroll processing and compliances in the most efficient way. Our payroll services cover the following:

• Designing CTC Structure:
  CTC or cost to the company is the total salary package the company pays to an employee directly or indirectly. CTC is inclusive of basic pay, allowances, reimbursements, gratuity, annual bonus, annual variable pay, etc. It may be defined as CTC = Gross Salary + PF + Gratuity.
• Labour Compliance:
  Labour law in India governs employers, employees, and trade unions, with a primary focus on the protection of employee rights. All organisations in India are required to adhere to various statutory compliances as set by different acts of the labour law. All employers are required to file EPF returns on a monthly basis by the 25th. In the event of labour non-compliance, a company may be penalised or its officials may be imprisoned for a period of up to three years.
• Tax Planning for Employees:
  Planning of tax payments is essential for salaried individuals as it helps save on taxes. Depending upon your business entity, employees' designations, and salary components, our taxation professionals can offer the best advice on tax savings in line with the latest amendments and rules.
• TDS Deduction and TDS Compliance:
  According to the Income Tax Act, every earning individual or company making payments like salary, commission, interest, etc. are required to deduct a percentage before paying the full amount. This is tax deducted at source or TDS.
• Setting up of a Reimbursement:
  Reimbursement is the amount paid for costs incurred. Some organisations pay the employees back for business-related travel expenses, medical allowances, food and entertainment expenses, etc.
• Drafting Employment Agreements:
  An employment agreement lays down the conditions of employment and the rights, responsibilities and obligations of both parties during the tenure of employment. This agreement also helps employees in getting a fair understanding of the job responsibilities and the expectations of the company. In addition, it serves as proof in the event of a dispute or misunderstanding among both parties.
• Drafting Your HR Policy:
  Every company functions on the basis of certain guidelines, which are set by the top management and the HR team. These guidelines may include the code of conduct for employees, their duties and responsibilities, the company's obligation towards the workers, discrimination policies, what activities are considered offensive by the company, employee benefits, disciplinary actions, etc.
• Drafting Leave Policy:
  Leave policies are regulated by the state legislations' Shops and Establishments Act and Factories Act as applicable. Generally, all state legislations hold a common provision where they provide seven holidays for national days and festivals. Hence, it is at your discretion to fix the number of leaves and our lawyers will help you frame it better.
• Planning Increments and Appraisals for Employees:
  Performance appraisals and salary hikes motivate your employees to perform to the best of their abilities. Appraisals provide them with comprehensive, honest feedback on their strengths and scope of improvement. We can assist you in planning out how to assign increments and appraisals to employees.

Why Filemydoc.com for Payroll Management

Some of the best reasons to choose us are:
1. 3 Working Days: Just share your details asked by our experts and we will do the rest for your Payroll processing & management.
2. Customer Score: We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.
3. Strong Legal Team: Our team of experienced legal and business advisors are a phone call away, should you have any queries about the process. But we'll try to ensure that your doubts are cleared before they even arise.

FAQs on Payroll Processing & Management

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