Indian Payroll Scenario

Indian Payroll Scenario

Indian_Payroll_Scenario

The increasing startup communities in India are expanding to the horizon and with growth comes the additional responsibilities towards their employees. For the company to grow in multitude it is imperative that its employees get paid on time and efficiently. Calculating payroll manually is not an easy task, it’s time consuming and tedious for any organization and that is where payroll solutions play a major role. And in a vast country like India with its varied geography and State level rules it is essential to have a payroll system which is robust and scalable.

When you say ‘payroll’, it is not just paying salaries to employees but an entire process that takes place straight from the employee punching in to the generation of his/her pay slip. This will be a tedious process to work on a month on month basis and would require dedicated resources, but a fool proof payroll system can handle all your salary related processes with ease.

To choose a solution that caters to the needs of the organization, we have to take in account the following points:

  • Salary Structure

An organization’s salary structure is the method of managing its salary philosophy. A company needs to have defined role and structure for each employee. A salary structure helps in structuring the salary of employees. Occasions for incentives are also allocated with in the salary structure. For instance, people with strategic roles are likely to have more opportunities for higher incentives.

  • Departments

Department represents sections/functional teams of a company such as sales, marketing, administration or human resources. You need to decide on what are the specific parameters and functions for each department and the various structures for the payroll processes with respect to each department.

  • Grades

Grades signify the hierarchy in an organization. As the company expands its operation there will be wide spectrum of employees who will be classified as executives, managers, business heads, heads and senior management. These grades need to defined distinctly as it sets a precedence for the flow of work in a company.

  • Perquisites

Perquisites means privileges by the employer to their employees apart from their regular income. It includes car conveyance, free food and beverages and leave travel concession etc. These perquisites are tax exempt for the employee, but generally borne by the employer. Thus, as an employer you need to outline the perquisite parameters that you will provide to your employees.

  • Professional Tax (PT)/ ESI

Professional tax (PT) is one of the statutory deductions made from the gross salary of the employees. It is the state-level tax and people from different occupations like business owners, working individuals comes under this tax type. Every state is known to have its own PT slab and some companies have their employees in multiple states. It’s really hard to manage professional tax slabs for employees in different states and that’s where payroll system comes in.

There are other taxes like ESI fund, maintained by ESIC, which is applicable to employees who earn Rs. 15,000 or less per month to provide the cash and medical benefits to them and their families.

  • Leave Policy

Every organization is bound to provide their employees with minimum earned leave and sick leave, but this policy might differ from state to state.  It’s indeed a challenge to have policies that would keep everyone happy, customers or employees. Thus, developing a leave policy would be a daunting complex task for HR departments in such global startups.

PayWheel– HR management software in India is payroll software that helps the HR professionals to deal with complex employee management, salary processing and payroll. For small and medium sized businesses, PayWheel is a one-stop solution for every payroll services that includes understanding these complex payroll terms as mentioned above.