Payroll Management Services in India - (An overview)
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.
The Benefits Of Payroll Management System (Benefits)
An effective payroll process involves a robust system that is compliant with payroll laws and labour laws as well. Here are some of the benefits of a complete Payroll Management system:
Easy Tax Filing And Reports:
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 avoids mismanagement of taxes that could
leave workers paying penalties. It also takes care of all the compliance and
statutory requirements which helps the company in filing taxes easily
Economical And Time-Saving:
Usually, payroll software is designed to integrate the existing accounting system.
This helps organisations save time and money on calculating large amounts of data.
Also, a few advanced versions have the provision to forecast and plan budgets for
what companies spend on each employee.
Every individual’s compensation, including salary, incentives and bonuses are included in the payroll system. This makes it easier for companies to evaluate employee performance at the time of appraisal and determine compensation.
A company must 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.
(Checklist) for an Effective E-Payroll system
The 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.
How to Create a Payroll Management System
A Detailed Process
At Tally Champion, 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:
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
Some of the components of CTC are base salary (fixed based on the employee’sdesignation, 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
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.
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 Tally Champion, 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..
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 ndividual 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.
Setting Up Of Reimbursement:
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, Tally Champion 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.
Drafting Employment Agreement:
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 jobresponsibilities and the expectations of the company. In addition, it serves as proofin the event of a dispute or misunderstanding among both parties.
Tally champion’s legal documentation specialists are adept at creating employment contracts for your consultants, freelancers and part-time, full-time and contractual employees.
Drafting 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. 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.
Drafting Leave Policy:
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.
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.
(How can we help) with Payroll Management
Our team of accounting professionals and payroll specialists work closely to
calculate and manage your organization’s payroll. We ensure to provide your
employees compensation, including bonuses, reimbursements, provident funds
and other benefits on time, every month as per your company’s payroll cycle.
We also process taxes, keep tabs on your new joinees’ information, as well as
prepare and execute pay orders through an electronic system.
Our legal professionals ensure that labour compliances such as EPF registration, TDS returns, IT returns and others are filed on time.
How many employees should I have avail Tally Champion Services
Why Tally Champion
35 Working Days
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 hande on an average of 400 requests or more every month.
By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.
With a team of over 78 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.