The success of the firm depends upon two significant factors. Hiring a quality team is one of the crucial pillars of the company, and at the same time, having an effective system to manage such a great team is another vital factor that plays an important role.
Employers are required to maintain the data of the number of employees, their salaries, tax deduction on their wages, amount of tax made to the government and number of leaves taken in a month. It is a cumbersome task that demands attention and constant effort.
Payroll gets crucial itself from the moment the company hires its first-ever employee. As we all know that payroll taxes considerably affects the net income of the business, it is required for two major perspective-legal compliance as well as accounting compliance.
Steps involved in Running Payroll
Payroll management can be a time-consuming and complex process. In its most basic form, running payroll involves the following steps:
1: Calculate gross pay
For salaried employees, divide the total annual salary by the number of pay periods in the year. For the employees paid on an hourly basis, multiply the hourly rate by the total number of hours worked and comply with the applicable laws for paying any overtime or premium compensation.
2: Withhold deductions
Calculate and withhold any qualified pre-tax contributions from gross wages, followed by Income Tax, Medicare and Social Security taxes, Provident Fund contributions, and any other voluntary or mandatory deductions.
3: Pay employees
Distribute net pay to employees and provide each employee with a pay statement that adheres to the applicable laws, if required.
4: Remit taxes to the government
Calculate and deposit taxes withheld from employee wages to the appropriate authorities by the specified deadlines using the proper submission methods.
5: Archive payroll records
The necessary documents related to payroll must be retained in accordance with the requirement (if any) of the applicable laws.
Benefits
- Fast turnaround
- Assistance throughout the entire life-cycle of the employee, right from the day of recruitment to their exit.
- Streamlining of payroll processes
- Optimised resource deployment
- Adherence to compliance and statutory requirements
- Error-free documentation and reports
Why Choose SAAAR?
We, at SAAAR delivers the best payroll management services in India and are dedicated to offering our clients the right thing at the right price, which includes: –
- Expertise experience.
- High-quality professional service.
- Save Time.
- Precise management of your payroll.
- Secure and Confidential.
- Customised Service.
If you are looking for the services of payroll in India, Kindly reach us at info@saaar.co.in; for the best payroll management consultant in Delhi, we shall assist you with our best consultancy.
Frequently Asked Questions
- How can effective Payroll Management affect the workforce of an organisation?
By ensuring that the employees are paid fairly and in a timely manner, an organisation can strengthen their faith in its financial integrity. An effective Payroll Management system ensures that all the last-minute glitches and manual errors are taken care of so that the payment to the employees is not delayed. This improves the morale of the workforce and motivates them to do better.
- What are the different payroll management methods?
There are majorly three methods of payroll management:
* Excel: This is the cheapest method for payroll management. Start-ups and smaller companies mostly use this approach. This method involves developing a payroll management template, which allows for calculations and the use of mathematical formulae on Excel spreadsheets. The drawback of this method is that it is challenging to manage and prone to errors.
* Payroll management software: This provides a simplified option for a company. There are several reliable applications for payroll management to select from. Such software applications generally provide a template for the input of the employee details and relevant input elements. The composition and size of the company determine the best type of payroll software that is suitable for day-to-day operations.
* Outsourcing: This is the most liked option of processing and managing payroll. It is cost-effective as the organisations don’t need to hire experts or use their resources to perform the functions. They just have to finalise the budget and hand over all their payroll responsibilities to a third-party payroll service provider.
- What are the major challenges faced while running payroll?
There are two main challenges faced while running payroll:
- Adherence to Statutory Compliances
Any company’s pay policy must thoroughly comply with the prevailing statutory laws and requirements of the Government. It avoids levy of any penalties and fines on the employer organisation.Hence, an entity must ensure that all the revisions and updates in the legal requirements are taken care of, and the payroll is processed accordingly.
- Keeping all the Data Intact
Since data like leave, attendance, and time management is crucial for payroll processing, one must reverify the same time to time with due validation to avoid discrepancies in paying the employees.
- What is the Payroll Management Process?
The process of payroll management requires careful planning and implementation. The payroll management process consists of three phases: before, during, and after the payroll management activity.
a) Before payroll processing
Various factors, including bonuses, leaves, and other benefits, are considered before processing payroll. The determination of these factors is based on the approval of the decision-makers of the company. Payroll generated in small companies is affected by fewer factors. With more prominent companies, the payrolls usually require software applications that ease the entire process. In both cases, all data processed must abide by the company policy and procedure.
b) During payroll processing
This stage involves the calculation of taxes, bonuses, and deductions. Validation and verification of all the amounts are done to ensure accuracy and avoid mistakes.
c) After payroll processing
All the deductions are made at this stage. The total funds budgeted on the payroll are disbursed through the relevant payment channels.
- Outsourcing of payroll services is best suited for what kind of organisations?
Outsourcing of payroll services can prove to be a time-saving and cost-effective option for the following kind of organisations:
* Organisations that have many employees whose working hours vary every week.
* Organisations that can’t justify the expense of buying payroll software for in-house use.
* Organisations that often hire foreign contractors.
