Payroll Management India
Payroll Management service refers to maintaining the financial records of the employees and complying with statutory payroll and labor laws. This includes a gross and net salary of the employees, incentives, and generation of payslips for a specified timeline.
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Payroll process refers to the maintenance of employee financial records with respect to their salaries, wages, net pay, tax deductions, incentives and other statutory requirements like PF (Provident Fund) and ESI (Employees' State Insurance). An effective payroll management system ensures timely payment of salaries to employees, which reflects positively on the company's financial stability, thereby leaving no room for legal implications. Thus maintaining a high morale within the company! A payroll management system is essential for every organization alike - startup, medium-sized or large-scale.
Easy Tax Filing And Reports
Economical And Time-Saving
Determine Compensation
Maintain Reputation
Company Documents: Certificate of Registration, Electronic Challan cum Return (ECR) document, Company GST AND TIN and other company documents are required to set up an efficient payroll management system.
Choose a payment schedule:
A flexible and fixed schedule – weekly, bi-weekly, semi-monthly, and monthly payroll schedules.
Classify employees:
Classify employees on the basis of contractors, freelancers, permanent employees, interns, and schedule payments accordingly.
Terms of compensation:
To keep a tab on employee hours, office timings, over time, etc company compensation terms have to be updated in the E-Payroll system.
- Certificate of Registration (CoR):
- Electronic Challan cum Return (ECR) document
- GST (Goods & Services) Certificate
- TIN (Taxpayer Identification Number) Certificate
At Bharatregister, our chartered accountants and accounting & taxation experts will take care of your end-to-end payroll process and compliances in the most efficient way. Our payroll management services cover the following:
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 Some of the components of CTC are base salary (fixed based on the employee’s designation, years of experience and the industry of employment); gross salary which is the amount without inclusion of deductions like PF, medical insurance, income tax, etc; fixed pay; variables; TDS, etc.
Labour law in India governs employers, employees, and trade unions, with a primary focus on the protection of employee rights. All organizations in India are required to adhere to various statutory compliances as set by different acts of the Labour law. Labour compliance is not only limited to filing PF returns, ESI returns, etc but also involves maintaining employee registers and other important records. There are multiple laws applicable to employers and employees, depending upon the type of their organization. For example: Factories Act 1948 is exclusively for labourers employed in factories. It lays down standards for the welfare, health, and safety of the people employed. Employees Provident Funds and Miscellaneous Provisions Act, 1952 is applicable to companies which have 20 or more employees. Under its Employee Provident Fund (EPF) social security scheme, both the employer and employee have to contribute a certain amount and upon the employee’s retirement, he/she will get a lump sum amount. This amount includes self contribution and employer’s contribution along with interest on both. In the event of labour non-compliance, a company may be penalized or imprisoned for a period of up to three years. At Bharatregister, our legal professionals can identify the labour compliance that is applicable to your business and offer you the right guidance. We also ensure time mandatory labour compliance filings are executed without delays.
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.
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. TDS percentages are prescribed by the IT Act.
Reimbursement is the amount paid for costs incurred. Some organizations pay the employees back for business-related travel expenses, medical allowances, food and entertainment expenses, etc. Right from reporting claims to reimbursements, Vakilsearch professionals help include your companies’ reimbursement policies. If you want to define reimbursement as part of your employees’ salaries then we can design the salary structure in a way to ensure all tax compliances are fulfilled.
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. Vakilsearch’s legal documentation specialists are adept at creating employment contracts for your consultants, freelancers and part-time, full-time and contractual employees.
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. The organization is free to draft its own HR policies and procedures, however, they need to be aligned with the company’s goal, industry and law.
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. The organization is free to draft its own HR policies and procedures, however, they need to be aligned with the company’s goal, industry and law.
Leave policies are regulated by the state legislations’ Shop and Establishment 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 can help you frame it better.
At Bharatregister, the payroll process can be split into three stages;
- Pre-payroll: During the pre-payroll, the dedicated relationship manager gathers inputs like the type of business, the number of workers in the organization, the industry, and other details of the company. Next, our payroll officer will define the payroll policy with respect to designing the CTC structure and the mandatory labour compliances for your business.
- Actual payroll: The actual payroll process is where the salaries of employees are computed and processed.
- Post payroll: In this stage, all the statutory deductions like IT (income tax), EPF (employee provident fund), TDS (tax deducted at source), ESI (Employees' State Insurance) are deducted, and contributions and reimbursements are taken care of. Also, employee tax liabilities are calculated based on the latest tax slabs as applicable for the individual. Once the process is completed, we will send the investment declaration form to company employees as per the conditions under the IT (income tax) Act. Finally, the pay statements will be generated and shared.
- Generally, the payroll period is from 1st to 30th/31st of every month. Hence, we will collect data at least 5 days prior to the end of the month (i.e., by 26th).
Statutory deductions are P IT (income tax), EPF (employee provident fund), TDS (tax deducted at source), ESI (Employees' State Insurance) which are deducted according to the individual’s annual compensation and the state legislations.
An allowance is a fixed sum that a company may decide to pay its employees to cover additional expenses. For example travel allowance, overtime allowance, medical allowance, etc. All financial benefits that employer offers under the head “salaries” are taxable. Certain allowances are partially or fully exempted. Reimbursements are the amounts that a company pays back to its employees who may incur business-related expenses. For instance, many companies provide medical reimbursements where employees can claim the amount by presenting appropriate bills and proof of expenditure.
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