The Payroll Management System deals with the financial aspects of employee's salary, allowances, deductions, gross pay, net pay etc. and generation of pay-slips for a specific period in different Industry Verticals.
While ensuring accurate and timely payment of salary is important, adhering to the various laws and regulations such as labor law, PF, PT and other statutory compliance is also critical. Non-adherence with these laws can attract serious legal and financial consequences.
To make sure that our employees are happy and we are law compliant, we need to have a proper understanding of what payroll is and how to run payroll effectively.
a business function, it involves:
1. Developing organization pay policy including flexible benefits, leave encashment policy, etc.
2. Defining pay slip components like basic, variable pay, HRA, and LTA
3. Gathering other payroll inputs (e.g., organization’s food vendor may supply information about the amount to be recovered from the employees for meals consumed)
4. The actual calculation of gross salary, statutory as well as non-statutory deductions,
and arriving at the net pay
5. Releasing employee salary
6. Depositing dues like TDS, PF, etc. with appropriate authorities and filing returns
7. Realising the bill amount from the client
