The payroll is the salary or the compensation that is paid by the company to the employee for doing the job. Payroll does not only involve salary but also other details which are related to the employee. The HR department will maintain the payroll in small company. For a bigger company they will generally use some kind of software for the processing. The HR management software can be used for the processing of the payroll by collecting and sorting all the details about the company.
Stages in payroll processing
There are three stages that is involved in payroll processing these are
- Pre-payroll activity-Stage 1
- Actual payroll-Stage 2
- Post-payroll process-Stage 3
The pre-payroll activity is the stage one of the process which involves defining payroll policy, gathering inputs and input validation.
Defining payroll policy: It is the establishing of the policy to the bank for the processing. As these will represent standard and are to be accepted by the management.
Gathering inputs: Gather the details from all the departments relating to the employee to ensure accurate calculation. That is the employee details such as the income tax declarations, facilities they avail. From the HR team all the details about the salary structure and the eligibility for benefits. From the finance team the information about deduction. The information about the number of leave taken and the shift the employee attends by the employee.
Validation: Collect all the data and the verification process is taken place without having a single mistake as it can spoil the process. The information of the active employees should only be present and should not have the details of the inactive employees. The data should be under the constraints of the company and the data should be in correct format.
Payroll processing is the second stage of the process. So after collecting all the details of the employee it is then the verification process occurs. Then upload the details in the payroll system. In all the companies for the processing of the payroll they will use specific software that meet all the standards of it. The payroll processing will look into all the details of the employee such as the employee portal, working hours, salary, taxes that are required to be paid, the shift they work, deductions and the attendance and other facilities which are available to them. As this is one of the important tasks which requires a lot of concentration while doing it. Using of the specific software When the specific software is used to do the processing then workload of the employee will be reduced.
While doing the payroll the administrator should stick and do the task properly. They should obey all the statutory compliance. There will be EPF, TDS, ESI deduction to be done while payroll processing. After the deduction that should be paid to the government. The salary which is given to the employee is to be noted down and maintaining should be accurate. As it is required for the company to maintain all the details.
Upload all the details in the EPR system. When all these processing are done then, initiate the payment through cash, cheque or through bank transfer. For hassle free transferring the company can create a separate account for transferring it. Collect all the details needed for the transferring of the money. After the processing they are to be made as a report and should be given to the finance department to check all the processing and to maintain all the records.
To do the processing sometimes one can look for the payroll management companies in India for proper processing .