Performing payroll is still a draconian task for many businesses. Reason being lack of a robust/modern day payroll tool, lack of resources and knowledge pertaining to compliance, payroll laws, etc. Unfortunately, many companies still stuck under ice-age resort to old-school practices and legacy tools when it comes to processing payroll.
Processing payroll on-time and in an error-free way involves knowing the minimum wage (labour laws), knowing the deductions, taxes, PF, tracking attendance, calculating leaves, and much more. This blog will throw light on some of the commonly asked things about payroll.
So without further ado, let us find out what these questions are:
- What is EPF?
Employees’ Provident Fund (EPF) is a type of deduction done from the salary of an employee. This deduction needs to be made at every payroll. In addition, the employer has to contribute 8.33% to the PF account. The employees can then withdraw the accumulated amount (after some years) after they choose to leave the organisation. It serves like pension to employees of private organisations.
- What are Gross and Net salary?
In its simplest form, gross salary/wage is the total salary of an employee before deductions. Whereas, net salary is the amount after deductions. Net salary is also termed as the in-hand or takeaway salary.
- What are some common types of deductions?
It goes like this – PF (Provident Fund), ESIC (Employees’ state insurance) and PTAX (Professional tax) are the most basic ones. We have already discussed about PF in the above section. ESIC deduction varies from state to state. It covers health insurance of employees. PTAX is the direct tax collected by the government of India.
- What parameters are considered before processing payroll?
The parameters affecting the final amount to be processed are LOP (loss of pay), unapproved leaves, approved leaves, deductions, compensatory amounts (if any), reimbursements, etc. The amount to be processed is calculated after taking into account all these necessary parameters.
- How do you process payroll? (stepwise)
The basic step in payroll is knowing the amount of hours/days the employee has clocked in or worked,. These calculations can be a little tedious job for your people to perform, if performed manually or on some standalone too. This is where a payroll software comes into the picture, since it automates most of the tedious work for the HR and finance department of a company.
- Which is the easiest and best way to perform payroll?
A well-thought payroll software without a doubt is capable of freeing up your accounts and HR department from the hassles of payroll. It stores all your employees’ data and helps you automatically calculate and process the payroll for every month based on intelligent computations and deductions.
- Can we pay our employees in hard cash?
It totally depends upon you. It is legal to pay in cash. Often preferred by a company that employs fewer employees/ workers. Because paying a lot of employees in cash every month may bring in a lot of miscalculations and chaos.
- Who are exempt and non-exempt employees?
According to labour standards, employees those who are eligible to receive overtime payments for more hours worked (hours depends on firm) are called non-exempt/ non-excluded employees. On the other hand, employees those who are excluded from such act are called exempt employees. Generally, salaried employees are the exempted ones.
- If I decide to subscribe for a payroll system, should it be cloud or on – premise?
Good to hear that you have chosen to be smart. A cloud based payroll software is always a perfect pick-me-up considering its cost-friendliness, flexibility and ease of use feature.
- What are the prime benefits of automating the payroll?
It totally keeps you away from payroll redundancies and mistakes. It ensures that legal procedures are being followed and compliances are met. Let’s your HR department focus on other important duties that require more human intervention and intelligence.
Hope these answers help you make a sound decision for your firm. To know how our cloud based payroll software can help streamline payroll for your business, write to us at email@example.com.