An e-Payroll system will help you to maintain financial records with respect to
salaries, wages, net pay, tax deductions etc.
Payroll process refers to the maintenance of the employees’ financial records with respect to salaries, wages, net pay, tax deductions, incentives and other statutory requirements like PF and ESI. Paying on time to your employees with no delays increases the morale of your company while reflecting the company’s financial stability, thereby leaving no legal implications. Hence, an e-payroll system is essential for every organization alike - startup, medium-sized or large-scale.
An effective payroll process involves a robust payroll system, compliance with payroll laws and labour laws as well. Some of the reasons why a business needs a complete Payroll Management in place are:
Under the Income Tax Act, every salaried individual is liable to pay taxes as prescribed by the State and Central governments depending on the salary and exemption limit. A payroll software regularizes and avoids any mismanagement of taxes that could leave workers paying penalties. It takes care of all the compliance and statutory requirements which benefit the company in filing the taxes easily.
Usually, payroll software are designed to integrate with the existing accounting system, and hence organisations can save time and money on calculating large amounts of data. Also, some advanced versions have the provision to forecast and plan budgets that companies spend on each employee.
As every individual’s compensation, including salary, incentives, bonuses are built into the payroll system, it becomes simpler for companies to evaluate the employee’s performance during their time of appraisal cycle.
In addition to fulfilling its financial obligations, a company must also ensure to maintain adherence to all the country's tax obligations and labour compliances like TDS, ITR, ESI, PF, etc. This enhances an organization’s reputation as a stable employer and also helps in increasing the brand proposition.
At Vakilsearch, our Chartered Accountants and accounting and taxation experts will take care of your end-to-end payroll process and compliances in the most efficient way. Our Payroll Management service covers 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 the 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 the employers, employees and trade unions, primarily focusing on the protection of employee rights. All organizations in India are required to adhere to various statutory compliances as set in by the 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 the self and employer’s contribution along with interest on both.
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 penalized or imprisoned for a period of up to three years.
At Vakilsearch, our legal professionals can identify the labour compliance that is applicable to your business and offer you the right guidance. We also ensure your mandatory labour compliance filings are done on time without missing the deadlines.
Tax planning is essential for salaried individuals as it helps get away from 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 person 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 refunded 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 add your companies’ reimbursement policies. If you want to define reimbursement as part of your employees’ salaries then we can design the salary structure in such 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 and the expectations of the company. In addition, it serves as proof upon the event of disputes or misunderstandings among both the 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 works within certain guidelines, which are set by the top management and the HR team. These guidelines may include the code of conduct of employees, what activities can they perform and what decisions they can make, 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.
Performance appraisals and salary hikes boost your employees and motivate them to give the best of their abilities. It helps them in getting comprehensive, honest feedback on their strengths and scope of improvement.
We can assist you in better planning of increments and appraisals for employees.
Our team of accounting professionals and payroll specialists work closely to calculate and manage your organization’s payroll. We ensure your personnel receive the correct compensation, bonuses, reimbursements, provident funds and other benefits on time every month as per your company’s payroll cycle. We also process the taxes, keep a tab of your new hire’s information and prepare and execute the pay orders through an electronic system.
Our legal professionals make sure the labour compliances like EPF registration, TDS returns, IT returns and other filings on time.
Just tell us a little bit about your business and you'll have the incorporation certificate in 35 working days (subject to government approval). It's that simple. In addition to yours, we'll be handling around 400 requests this month.
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.
Our team of experienced 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.
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