What is Payroll? Complete Guide With Basics, Process, and Functionalities
It is entirely true that the Payroll process in India is tedious and requires accuracy. And for an organization that is expanding both department-wise and employee-wise, HR persons find it even more complex to maintain their salary processing with almost zero errors. But with newer technologies, there is a platform in the market like e-payroll system, HRMS, etc. which makes payroll-related management very relaxed for HR.
The main complication here is how to choose the perfect payroll system that fits your necessity. For this, you should have a clear idea of payroll definition, what is payroll in HR, the critical requirements for its calculation, and the statutory norms. Read along to know how salary is calculated in India.
What is Payroll in HR Management?
For any organization, payroll is the list of its employees eligible to receive their regular wages against the time and efforts they have spent on projects leading to the company’s growth rate. Payroll management thus proves to be an essential aspect of HR operations. But why it is essential, read along to find out.
Why is Payroll Important to Consider?
Payroll is important as it is the prior quantity that employees are interested in majorly. And processing payroll can be very prone to errors and mistakes. What if any employee lefts out during processing? What if you forgot to consider allowances and investment details during calculation? These mistakes can turn down an employee’s morale and make him/her unmotivated.
Along with this, a payroll process must be entirely statutory compliant to evade any legal actions by the Government. Being lawfully compliant means it pays according to the central and state regulation, including minimum wages, overtime payment to the worthy employees, TDS deduction, PF, ESI, etc. Refraining from any of these regulations can impose legal consequences, including a threat to the company’s existence too.
That is why any organization must seek a proper method and system to process its payroll in an error-free and compliant way.
What is a Payroll System?
A Payroll system is a platform that an organization uses to automate their payroll process. This system helps to build a flexible policy that benefits the employees. Such a system takes data from attendance and time management, leave, and employee self-service and combines them to calculate the accurate payroll that is also statutory compliant.
Thus, the payroll system minimizes the employer’s efforts in a calculation to help him focus on more business strategic tasks.
To process a perfect and error-free payroll and choose an efficient payroll system, you first need to understand how a payroll process works.
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