Posted by When you outsource your payroll process to a payroll provider, you can manage your payroll for your business.
How?
Are you still relying on paper and pen for payroll processing? The complicated calculations, the hurried document keeping, and manual management. Do these tasks consume most of your month’s end time?
So, why do we continue with the manual process of payroll processing? Automatize it by using the top system for payroll processing software.
Explore the blog. We’ve addressed all your questions regarding processing payroll and ways that automation could save you time.
Let’s get started!!
Is Payroll a thing?
Payroll is the method of paying salaries to employees of an organization. It begins with the list of employees for whom salary is to be paid and then records the costs.
The payroll process involves calculating the amount due to employees in a specific pay period after taking all deductions such as TDS, PF, meal coupons, and meal coupons. The pay cycle is the time between two salaries paid to each employee. In India, in most cases, pay every month since many companies pay their employees monthly.
The payroll process requires multiple teams to cooperate, such as HR, finance, and payroll. With the advent of modern technology, the expense of these services has been reduced through HR payroll software. Today, companies can handle all processes involved in payroll.
What exactly is Payroll Processing Software?
Payroll processing software can be described as cloud-based, on-site software that controls and automatizes procedures related to employee salaries. This software may be offered as an individual system or incorporated into an HRMS suite that is large HR Payroll Software.
The HR payroll software available in India can be adapted to work to the requirements of small, medium, and large corporations. Although a few functions may vary based on what size of the business, the primary goal of HR Payroll Software is still the same: processing employee salaries in a timely and accurate manner.
What is the Payroll Calculation Method in India?
Payroll calculation in India is more complex than it may appear. There are a lot of elements that need to be rearranged when calculating the pay of employees.
A vital aspect of a pay structure in India is:
- CTC
- Gross Salary
- Net Salary
- Allowances
- Prerequisites
- Formula 16
- Pay-slip
- Deductions
- Reimbursements
- Ad-hoc components
- Bonus/Incentives/Expenses/One-time payments
- Company Bank Details
- Signature Information
- PAN of the Company, PF, TAN, PT, ESI, LWF (if applicable) information
- Declarations of Employee Investment Declarations
- Financial Information of the Employee
- Previous Salary Information
- Annual CTC Gross of all employees
The payroll calculation is done by using the elements mentioned above using the help of a formula.
The Payroll Processing Process in India: Brief Stages in India?
The entire process of payroll is broken down into three stages. The three stages are Pre-payroll, actual Payroll, and post-payroll processes. This blog discusses each step in depth. Find out more.
1. Pre Payroll Activity
· Payroll Policy
In the first stage the first step in the payroll process is to determine the policy for payroll. In this stage, you set the guidelines for the bank in the process of paying employees. To turn these guidelines into a standard, they need to be endorsed by management. These policies include an employee leave and benefits policy and attendance policy, pay policy, and more.
To manage the payroll department efficiently, businesses must establish a payroll policy. This will ensure that the payment of employees is done punctually and on time.
· Gathering inputs
In stage 2 of step 1, you will need to gather the information from different departments to ensure your payroll is accurate on time.
This data collection process could be a complicated task initially. However, to simplify it, you must install HR payroll software in your business. Payroll program in India that includes features like attendance and leave management, a self-service for employees portal, and other features to simplify paying your employees and eliminate delays and errors.
· Validation of input
Validation is essential for ensuring accuracy. So, after you’ve collected and verified all the information, you must verify the validity of the data. Since a small error in the payroll information could cause a complete disruption to the payroll process. To ensure a precise payroll process:
Ensure that the list includes the details of only active employees and not information from employees who have left the company.
Verify that the information is in line with the policy of the company.
Check that the information is in the proper format.
2. Actual Payroll Process
· Payroll Calculation
Once the data verification has been completed, you can transfer it to your payroll program. You receive the net amount after the necessary deductions and taxes. In the second stage of the payroll process, you review the entire process again to ensure everything runs smoothly.
· Payroll System! What exactly is it?
Payroll software is software that automates the process of paying taxes. They come in two standalone varieties: a payroll system and one that integrates payroll systems. It is an integrated system that works with an attendance system, a leave administration system, and a self-service portal for employees. It helps keep an eye on employees’ leave or working time, calculate wages, deductions, taxes, printing payslips, etc.
A well-functioning payroll processing software minimizes the burden on employers and allows them to focus on other business processes.
3. Post Payroll Process
· Statutory Compliance
This step falls under the third stage of the process for payroll. In this stage, the payroll administrator must adhere to the statutory requirements. This process adjusts legal deductions, such as ESIC, PF, EPF, TDS, etc.
· Payroll Accounting
Any business, large or small, has to maintain a list of accounts. One of the most important entries in this book is the amount of money paid to employees. Thus, during the payment process, all essential data must be input into the .
· Payout
They are following the successful completion of all of the above steps, after which the salary is transferred via cash, chaque, or bank transfer. Most companies prefer to keep their employees’ salary accounts to make transfers easy and hassle-free.
To pay your salary via bank transfer, you must submit the bank statements for your salary account in the direction of your branch. The statements contain information such as the account number, employee ID, salary amount, and much more.
· Reporting
The reporting process is the final step of the payroll process. In this step, you must prepare accurate reports with information such as department/branch-wise employee costs. The reports are provided to the finance department or the management team to analyze the data further.
Conclusion
Payroll processing takes an enormous amount of time. It also involves many departments. Companies develop ways to link the different departments to make the whole process smooth and exciting. Since you are acquainted with the basic principles of payroll processing, you can apply this knowledge to revise and improve the methods employed by your organization.
Test Superworks Payroll software now to experience the automation of payroll compliance as never before. If you’d like to focus on managing your business’s core activities instead of worrying about mandatory payments.