The task of managing the payments of wages to the employees by a company is termed as Payroll Processing. It may sound as an easy activity for the company but can be lengthy and time constraining. We at Ezybiz India Consulting LLP, help your business to compute the payrolling processing and make it easier for you. It is a multi-faceted process and a lot of steps have to be followed in the whole payroll processing in an organization. These steps include-
- For a selected time period, gathering the time information of the employees including name, address and the additional information of the employee that the company may seem to track or have.
- Managing all the benefits given to the employees by the company and deductions like provident fund, insurance etc., if any.
- For a particular time period, distributing the employees pay through any mode fixed by the company either through printed cheque, direct bank deposits, etc.
Types of Allowances under Payroll Processing:
There are certain types of allowances that are being provided by the company to its employees. And while computing the taxes and everything these allowances are taken under consideration during the Payroll Processing. These allowances are-
- Transport allowances
- Allowances for House rent or House Rent Allowances (HRA)
- Meal allowances
- Leave Travel allowances
- Allowances for Education
- Medical allowances
- Special allowances for uniform, daily ordinary charges, books, essentials etc.
Methods of Payroll Processing:
Usually, companies have a separate department for payroll processing but some companies prefer to make it a part of the human resource department and many others prefer to outsource the payroll processing to the 3rd party service providing companies. The three methods that any company can use to calculate the payrolls are-
- Payroll outsourcing: When a company chooses to outsource its payroll processing that means it wants an external organization or service providing agency to handle its all payroll activities and functions. The service providing agency usually computes the payroll based on the information provided by the company regarding its pay cycle, employee salary information each month and other data and details of the reimbursement, leaves, attendances etc. they also take care of the statutory compliances. It is an important part of the outsource accounting Entities that do not have a proper payroll officer or department takes up to outsource the process of payroll services.
- Payroll software: These days most of the companies are using software to calculate the payroll. But to make or run it successfully the company has to make sure that the inputs for the same are coming from all the reliable sources at proper intervals and that too in a manner that is seamless. A company can choose the right kind of payroll software depending on its size.
- Payroll management through excel- Third method of payroll processing is the same old-fashioned method used by the companies in which the standard payroll calculation templates are used for calculation of payments on the excel sheet. Companies that have less-number of employees use this method. It does not involve any cost and the mathematical formulae for the calculating the payrolls are already set up and fixed in the excel sheets for the officers.