New Delhi, 19th August, 2023 – The Income Tax Department has introduced simplified rules for calculating the value of rent-free accommodation provided by employers to their employees. This change, stemming from an amendment in the Finance Act of 2023, aims to streamline the process of determining the taxable value of such benefits.
A Clearer Approach to Tax Calculation
The newly notified rules by the Income Tax Department offer a straightforward method for calculating the value of rent-free accommodation provided by employers. This alteration responds to the need for a more transparent and simplified way of determining the taxable value of this type of benefit.
Transitioning to Current Data
One key aspect of the updated rules is the shift to using more current and relevant data. The rules now rely on city categorizations and population thresholds from the 2011 census, ensuring that the valuation of rent-free accommodation resonates with the present urban landscape.
A side-by-side comparison of the former and current perquisite rates, based on population categories, reveals:
Previous Categorization and Rates:
Cities with a population more than 25 lakh: 15%
Cities with a population between 10 lakh and 25 lakh: 10%
Cities with a population less than 10 lakh: 7.5%
Revised Categorization and Rates:
Cities with a population more than 40 lakh: 10%
Cities with a population between 15 lakh and 40 lakh: 7.5%
Cities with a population less than 15 lakh: 5%
This recalibration not only promotes fairer taxation but also recognizes the dynamic socio-economic shifts that Indian cities are experiencing.
Revised Rates for Fair Taxation
As part of the changes, the Income Tax Department has also adjusted the rates used for calculating the taxable value of rent-free accommodation. These rates are now structured to reflect the size of the city, aligning with the new population categories. This approach ensures that taxation remains fair and reflective of the varied socio-economic conditions across different cities.
Implementing the Changes
Employers and payroll professionals need to be aware of these new rules and how they impact the valuation of rent-free accommodation. With the simplified rules and revised rates, the process becomes more transparent and user-friendly. It’s important for employers to accurately determine the taxable value of such benefits and incorporate the changes into their payroll calculations.
Conclusion
The Income Tax Department’s decision to simplify rules for valuing employer-provided rent-free accommodation is a positive step towards a more transparent and efficient taxation system. By aligning the rules with current demographics and making the calculation process more straightforward, the department aims to make tax compliance easier for both employers and employees. This move underscores the government’s commitment to fairness and simplicity in the taxation framework, benefiting all stakeholders involved.
Payroll Practices and Calculation in Excel – Live Payroll Training in Excel – Download free excel payroll add-ins provided by IPTM, payroll calculation, practices and payroll training | live employee data | free excel add-ins – IPTM
Dear Learner,
Please watch this video and you can do live Indian payroll calculation in excel. You can do more than 200+ payroll calculation practices in excel using this Payroll Excel Addins (Add-ins) which is freely provided by IPTM – The Institute of Payroll Training and Management.
You can apply your payroll training knowledge so that practice in excel on live employee data to brush up topics. download free excel add-in provided by IPTM – The Institute of Payroll Training and Management and start payroll practices.
To do payroll calculation in excel, you need to create a standardized template .That you can use from month to month. It should have tabs for each month . With links to formulas. That calculate employees tax, deductions , and pay. You also need a ”set up” tab. From which your payroll calculation can pull standard information. Like pay rate and benefits enrolled.
Keep the ”set up ”tab up-to-date. So that you can easily link to it every month. This helps with automation. And prevents double work. Moreover, additional tabs for general instructions. Employer tax information, employee data set up and year end payroll processing.
Payrollpedia:
A full- suite international payroll processing system in excel. Which contains a cloud based multilingual and multicurrency system for employer and employee. For free software in excel download. ⬇
🔴There are more advance tool available to have your payroll done. However , creating your own in excel ,gives you a kind of security. Because you can monitoring your own payroll there.
🔴Moreover, You can add
some more column added like health insurance premium , life cover premium , etc. However , this is a simple layout.
FAQ:
1️⃣ How to do payroll in Excel?
To carry out payroll on Excel , there are several steps .Right from collecting data to calculating payroll variables. you can do at your convinience .Moreover , it can be a simple process if you do it
correctly.
2️⃣ How do l calculate payroll time in Excel?
For calculating payroll time , the parameters you required are the number of hours and minutes worked . Therefore , subtract the start time from the end time to obtain values for your
payroll time.
THANKS FOR READING.
Rupa Banerjee- Payroll Editor.
Email- rupabanerjee70@gmail.com
Payroll Practices and Calculation in Excel
Payroll Practices and Calculation in Excel
payroll calculation, payroll practices in Excel, Live payroll practices, payroll training, payroll employee data, free Payroll excel add-ins, payroll addins, iptm noida, free payroll, live payroll practices, एक्सेल में पेरोल, payroll calculation in excel, salary calculation in excel, payroll in excel sheet, how to make payroll in excel, payslip in excel with formula, payroll computation, payroll computation excel, employee payroll computation, payroll, india payroll training
To start a new new business , a new establishment is full of challenges , even for the most experienced entrepreneurs. Because there are so many moving parts , it is the common for some elements to be pushed aside if they aren’t immediately pressing.
Some new business owners may be great at identifying and managing talented staff or marketing their services to grow a customer base . But without the commitment to efficiency running the fundamental operations of every business , those skills won’t have a chance to shine . One of those operations is payroll.
Understanding how to calculate payroll is essential . It ensures that your business is compliant with the various employment and tax policies in your area , as well as building confidence in your staff that their work will be compensated with reliability. Unfortunately , payroll is one area of business that entrepreneurs might not place much focus on or in which they might not be well versed.
But it doesn’t have to be a headache . Here is a quick breakdown of payroll process and why grasping the details can help your business grow.
How to calculate payroll ?
Much of the payroll process begin with calculating gross wages – whether hourly or salary – and then subtracting deductions and taxes from the amount of determine the final payment that employees receive in their paycheck. Those gross wage calculations and following deductions are dependent on several factors in each case , but here are some general guidelines and examples to keep in mind.
Many businesses pay their stuff on an hourly basis. This means keeping an accurate track of hours worked. Timekeeping is an essential part of the process . Not only does it determine how many hours need to be compensated but also if there are any changes in wages such as overtime or hazard pay.
For this example , if an employee makes an annual salary of ₹ 120000 and is being paid on a semimonthly schedule – assuming a general pre determined 40 hours workweek- the calculation for their gross pay would be as follows.
🟢 ₹ 120000 annual salary divided by 24 pays periods :
₹ 120000 /24 = ₹ 5000.
Calculating payroll for employees:
Step 1 : Determine Total Time worked for the period.
Step 2 : Calculate Gross Pay. ( Before deduction and taxes.)
Step 3 : Determine your payroll deduction.
Step 4 : Find the sum of payroll taxes.
Step 5 : Subtract Deductions and Taxes from Gross Pay.
monthly payroll calculation.
Many businesses with full time employees offer various benefits in addition to monetary compensation. Whether providing healthcare , retirement savings , or other similar options, many of these benefits are offered on a ”pre- tax” basis . If there are any benefits the employees has elected to deduct from their pay checks , they need to be subtracted in the steps of process that is legally required , whether that is “pre- tax” or after taxes have been taken out.
Subtract necessary Taxes
Once any necessary benefits have been deducted from the employee’s paycheck , the most complex part of the process arrives. Understanding and currectly executing payroll taxes are an essential steps for every business.
Pay Your Employee.
Even when the gross pay has been calculated , benefits have been elected , and those taxes have been withheld , the payroll payroll process is still not yet complete. Employers must be able to execute their payroll to get employees the wages they have earned. This means finding a way to pay your stuff in full, and paying them on time.
Payroll calculation in India is an overwhelming process as it constitutes enormous financial elements like gross salary , net salary , bonuses , daily wages , leave, compliance , and may more such elements which are part of each employees ‘ hire to retire journey with an organization.
Employees are viewed as the most significant asset of an organization . Thus , company invest a generous amount of time and energy in recruiting , training and setting up an adequate process for each employee . One of the most significant chores in payroll exercise is the processing of payroll . In a way , employees rely on the company’s progress to get paid without any delays . Irrespective of the size of the organization , whether small, medium , or large, payroll plays a crucial role in HRM( Human Resource Management ).
understanding basics payroll.
How is Payroll calculated in India ?
1 ) Net Salary = Gross Salary – Gross Deduction .
2) Gross Salary = Basic salary + HRA + All types of Allowances + Reimbursements + Arrears + Bonus .
3) Gross Deductions = Professional Tax + Public Provident Fund + Income Tax + Insurance + Leave adjustment + Loan repayment (if any).
STAGES OF CALCULATING PAYROLL.
payroll processing steps.
🟠 Pre – payroll:
Organizations of any industry cannot deny the fact that payroll is one of the most consequential functions performed in daily business activities as it is related to employee salaries as well as the company’s finance .So as to run an acqurate payroll , data inputs are assembled from multiple source in the company.
Payroll is a time consuming and tedious activity due to the various compliances to be adhered to. For the sake of a smooth payroll process , a sorted out procedure must be set up to guarantee an error – free payroll. The first phase, in such a process flow, are the pre – payroll activities .
Below are the activities majorly taken care of , in pre- payroll activities:
🟠Understanding taxable , non- taxable and particularly taxable components of the salary.
🟢 Gathering payroll data.
🟡Data required to run a payroll.
🔵Data validation before proceeding further.
Understanding taxable , non- taxable and partially taxable components of salary.
While the basic compensations completely taxable , there are different advantages offered to the employees as allowances and prerequisites . These recompenses are offered to employees for the cost they bear during work and can be totally liberated from tax collection, or they can be taxed , either partially or completely.
A salary slip consists of two categories – Earning and Deductions , however , the various terms listed under them can be confusing . Moreover , these different components have different tax implications, adding further to the havoc . While some components are fully taxable , some are fully exempted based on certain conditions.
Periodically , companies also offer perks to their employees that may or may not have tax liabilities . Here , you will understand the tax implications of the common constituents of salary.
Gathering data to run payroll :
Gathering the data for processing the payroll is a task in itself. The traditional pattern of working towards data assembling is done by paper based sheets or excel sheets. Recent evolution in technology has led to thedevelopment of web based systems. These can be aimed at both managers and employees. There is no doubt that excel is a very useful tool to create charts ,carry out complex calculations and present insights.
Data required tocalculate payroll :
1️⃣ Leave and attendance data.
2️⃣ Payment and deduction.
3️⃣ Income tax information.
🟢 Actual payroll calculating:
While calculating actual payroll , the following elements plays a major role :
➡ Salary components and structures Configuration.
➡ Statutory Compliances.
➡ Finance setting , HRA , tax considerations for bonus given to employees , old/ new tax regime.
➡ IT Declarations – globally.
➡ IT – Declarations – employee.
➡ Loan facility.
➡ Freezing the salary by finalizing payroll.
Payroll calculation ,:
🟥 Running the payroll .
🟧 Leave attandence and LOP data .
🟨 New joiners and exits .
🟩 Salary revisions , Arrears and Bonuses payments.
🟦 One time payments and deductions.
🟪Reimbursements.
🔵 Post payroll:
Post payroll activities are following :
🟢 Review , generate and issue of Payslips , TDS Reports , Cash Reports .
🟢Accessing the Bank Statements and downloading them by choosing a financial year, frequency , perios and batch.
🟢 Employee information like employee count , CTC , Gross and net pay., bonus and loss of pay., commissions, processed date , processed by etc.
🟢 PF , ESI, PT challans , to be generated in ECR format and along with arrears.
Filing
Form 24 Q : Form 24Q is used to file the return for tax deducted at source from salary payments .Form 12 B : Form 12 B is a statement to be provided by the employer to an employee if he is joining in the middle of the year.
Form 12 BB : Form 12 BB is an investment declaration form in which employees would mention all investment made by them for tax saving in a financial year.
Form 15 H : Form 15H is for senior citizens , those who are 60 years or older to file ITR valid for one financial year.
Form 15 G : Form 15G is for everybody else to file ITR valid for one financial year.
Form 16 A : Form 16 A is the certificate of deduction of tax at source and issued on deduction of tax by the employer on behalf of employees. These certificates provide details of TDS/ TCS for various transactions between deduction and deducted.
Form 16 B : Form 16B certifies that the tax has been deducted at source on the income earned from the sale of immovable property ( building or part of it.) other than agricultural land, and the TDS has been deposited by the property buyer with the income tax department.
Form 10 C : Form 10 C is filled and submitted when you want to claim benefit under the Employee Pension Scheme (EPS).
Form 26 QB: Form 26QB is a return cum challan for payment of TDS to the government.
Form 26AS : Form 26AS ( Tax Credit Statement ) is the annual statement in which the details of tax credit are maintained for each taxpayers as per the database of the income tax department. Form 26AS will reflect the tax credit against the PAN of the tax payer.
Form 27C : Form 27C is a document that can help getting tax exemption from the tax deducted at source . Both buyers and sellers can use this for all the goods specified at the Income Tax ACT..
Form 24 G : When TDS for a salaried individual or a non- salaried individual or even a person who is not a resident of the country , is not salaried but still has to pay tax , the Accounts Officers who process such need to use a form to submit information about the deduction. Form 24G is used to submit such information for processing.
Form 64A : Form 64A contains the statement of income paid or credited by Venture Capital Company and credited by Venture Capital Fund to be furnished under section 115U of the income TAX ACT 1961.
Form 24Q : The employer has to file a salary TDS return in Form 24Q.
24Q is to be submitted on a quarterly basis . Details of salary paid to the employees and TDS deducted on such payment is to be reported in 24Q.
Form 12BA : Form 12BA is a detailed statement showing particulars of perquisites, other fringe benefits , and profits in lieu of salary.
Form 27 EQ : Form 27EQ is a quarterly certificate thet contains details of tax collected at source or TDS under section 206C of the income tax act 1961.
Form 49B : Form 49B is an application form under section 203A of the income tax act 1961 for the assignment of TAN number or TAN deduction and payment account number.
🔶 HOW TO USE EXCEL IN CALCULATING PAYROLL.
Formulas :
1 . GROSS EARNING:
To calculate the gross earning of an employee during a certain pay period , multiply the cell with the number of
hours worked, by the cell with the rate of pay , using the format = (A1) * (B1)
2 . Deductions like income tax or health benefit can be calculated by subtracting their percentage from gross earning .
3 . Paid time off : If your employee are entitled to paid time off , then you likely to have a system for accruing vacation time for every day or hour worked. If it is accrued hourly , you first need to devide the total number of vacation hours that they are entitled to in a year by the number of working days in the year.
Excel has a variety of built- in-formulas which can be used to calculate payroll.
CALCULATION OF PAYROLL IN EXCEL.
How Understanding Payroll Can Help Grow Your Business.
Running an efficient payroll calculation is more than just paying your employees. It adds value in various other ways . Having a complete understanding of your business ‘s payroll can help you determine whether hourly or salary wages make more sense. It can assist in your process of deciding whether adding more stuff is possible or determining how much certain tasks or roles are costing your business based on the time employees are spending doing their job.
Knowing the payroll system inside and out can also paint a picture of what tax effects might be brought on my staffing decisions and can steer you away from any costly errors.
Cost to company (CTC) is a term for total salary package of an employee , used in countries such as India and South Africa. It indicates total amount of expenses an employer (organization) spends on an employee during one year. It is calculated by adding salary to the cost of all additional benefits an employee received during service period .If an employee ‘s salary is rupees 500000 and company pays additional 50,000 for their health insurance , the CTC is rupees 550,000. Employee may not directly received the CTC amount. CTC comprises of several components such as HRA, medical insurance , provident fund etc. Basically CTC is the cost spent by the employer spend in hiring and sustaining the employee in the organization .He may not get all of it as cash in hand , some amount can be cut in the name of PF , and medical insurance etc.
For every HR and payroll professional , structuring salary in an inevitable task , Despite the significance of the task , professionals are often uniformed of the technical and the best practices of a drafting a complete and efficient salary structure.
Whether you are working in Talent Acquisition , Generalist or Payroll profile , you should know , how to make a salary structure or commonly referred to CTC structure. A competitive CTC structure in Talent Acquisition may lead an applicant to accept or reject your offer . Similarly , both generalist and payroll processing , it is critical.
Terms like CTC , Basic salary , gross salary , Allowance , reimbursement , tax deductions , provident fund, insurance etc. often create confusion . In this article we tried to define various component of a salary structure for everyone to understand easily.
What is CTC Break up?
CTC break up
CTC BREAK UP
COMPONENTS OF CTC
🔴 Basic salary
Basic salary is that amount that is considered as the basic amount for an individual . It is the fixed part of the compensation .
The salary components depends on the designation of the employee and the industry type.
🟡 Gross salary
Gross salary is that amount of salary that comes after adding the basic salary and allowances without substracting the taxes and other deductions . The bonuses, holiday pay , and overtime pay are also included in gross salary.
Gross salary = Basic salary + HRA+ Other Allowances.
🔵 Net salary
Net salary also be called as take home salary . This amount is the amount that an employee gets after deductions like that of TDS and other deductions like PF or medical insurance as per the company policy and your agreement at the time of joining the company .
Net Salary = Basic salary + HRA + Allowances – Income Tax – Employer’s Provident Fund – Professional Tax.
🟢 Allowances
Allowances is that amount that is received by the employees for meeting the requirements of the service . The allowance are being provided to the employee in addition to the basic salay. It is differ from company to company.
Here are the some of the common allowance.
House Rent Allowance .(HRA)
HRA
It is the allowance given to the employee for incurring expenses related to rent of their accommodation.
Leave Travel Allowance (LTA)
LTA EXEMPTION
It is the amount which is given by the company to an employee to cover domestic travel related expenses. It doesn’t include food , accommodation , that the employee or people travelling along with him incur.
Statutory Bonus
BONUS PAYMENT
Statutory Bonus is an additional payment to employees with the intention of motivating them under payment of Bonus Act 1965. Bonus is 8.33% of basic or 20% of basic , and it can be paid either monthly or annually.
Special Allowance .
This allowance is balancing component of the salary structure . It is usaually used as the leftover of the CTC when the rest components have been paid out.
Conveyance Allowance
This allowances is being given to the employees to commute from home to office. Conveyance Allowance limit is Rs . 1600 per month.
Dearness Allowance.
Dearness Allowance.
It is an allowance which is paid to the employees to handle the effect of inflation . This is mainly for government employees , pensioners and public sector employees . Other such allowance are medical allowance , special allowance and incentioves etc.
Reimbursements .
Employees are also reimbursed certain amounts like that of medical treatment , and bill relateds to office such as trips , news paper bills , or phone bills etc. This amount isn’t received as a part of salary , the employee is expected to show the expense receipts for reimbursement . There is also a maximum amount limit for each expense that the company would be liable to pay.
Employees Provident Fund (EPF)
EPF
PF is an investment done by both the employer and employee every month , the sum of this will act as the amount that he will give you . The amount that goes into PF each month as a contribution depends on the basic salary amount as 12% of basic salary is contributed from both the sides.
Employee State Insurance Corporation (ESIC)
ESIC deduction are mandatory for employees whose gross salary is less than 21000. Employee have to make a contribution of 0.75% of gross salary and employer have to make a contribution of 3.25% of gross salary.
🔴 Income Tax ✂✂✂✂✂✂✂✂
The tax levied on one’s personal income is called income tax . Usually , an employee gets his or her salary after the tax deduction by the employer . This process is called as Tax deduction at source (TDS). The deducted tax amount is paid to the government by the company.
Individual has a choice between old tax regime and new tax regime.
Net Income
Income Tax
Health and Education Cess
Up to Rs. 5 Lac
Nil
Nil
Rs. 5,00,000 – Rs. 10,00,000
Rs. 12,500 + 20% on income above 5 lac
4% of income tax
Above Rs. 10,00,000
Rs. 1,12,500 + 30% on income above 10 lac
4% of income tax
INCOME TAX CHART (OLD TAX REGIME)
INCOME TAX SLAB
TAX RATE
Upto Rs 2.5 lac
Nil
Rs 2.5 lac to Rs 5 lac
5% (Rs 12,500 tax rebate per section 87A)
Rs 5 lac to Rs 7.5 lac
10 %
Rs 7.5 lac to Rs. 10 lac
15 %
Rs 10 lac to Rs 12.5 lac
20%
Rs 12.5 la to Rs 15 lac
25%
Rs 15 lac and above
30%
INCOME TAX CHART (NEW TAX REGIME)
🟢 Professional Tax
Professional TAX rates In different States.
Professional tax is a tax charged by the state government in order to let an individual practice a certain profession . The maximum amount payable per year is INR 2, 500. It depends on one’s monthly salary and also on the state in which one works . The professional tax levied varies from state to state in India.
In some states and union territories professional tax is not imposed, they are –
The company issues a form 16 which contains the details about the salary earned by the employee and the amount of tax deducted.
The taxpayers are required to submit Form 16 to file the Income tax returns every financial year. It acts as the proof of his/her income and tax paid to the government.
Gratuity
Gratuity Calculation
Gratuity is the part of the salary that is received by an employee from the employer for thr services offered by the employee upon him or her leaving the job.
Though an employee can receive the gratuity amount only after 5 years , it will be deducted by the employer every year and hence it will get deducted from CTC.
Life insurance and health insurance
Many company provide health insurance and life insurance to their employees , the premium for which is borne by the employer and is included in CTC. Hence it has to be deducted while calculating your take home salary.
Deductions are generally divided infollowing sections.
SECTION
NATURE
LIMIT
80C
Basic deductions from total income
1,50,000
80 TTA
Interest from deposits
Rs. 10,000 on interest, available to an individual and HUF, deduction allowed on interest earned from a savings account with a bank
80 G
Donations to charity
50% of the donation made is allowed to be deducted from the taxable income. However, if the amount is more than 10% of the gross total income, the excess will be ignored.
80 E
Educational loan
deduction allowed on total EMI part, no limit
80 EE
Home loan interest
Allowed on interest paid on home loan up to maximum Rs 50,000 per financial year.
80 D
Medical insurance premium
For self and family- Rs 25,000, For self and family and parents- Rs. 55,000, For self and family and senior citizen parents- Rs. 80000
A CASE STUDY
Let us take an example to understand how to calculate take-home salary:
Rana’s CTC is Rs. 16,00,000. Other salary components of her salary structure are mentioned below:
SALARY COMPONENTS
AMOUNT (ANNUAL)
AMOUNT (MONTHLY)
CTC
16,00,000
–
Basic
6,40,000
53,332
HRA
3,20,000
26,666
EPF
21,600
1,800
Sec 80C Investment
1,00,000
8,333
Leave Travel Allowance
20,000
1,666
Special Allowance
5,75,324
47,943
Gratuity
23,076
1,923
Professional Tax
2400
200
NOTE:
🟧It is upto Rana to decide how much he wants to invest and claim under section 80c . The maximum deduction possible is 1,50,000. EPF amount also comes under section 80c.
We have assumed that Rana pays INR 30,000 per month as his rent
DA is assumed to be zero because Rana is a private sector employee.
Step 1: Calculating gross salary
Gross Salary = CTC – (EPF + Gratuity)
Gross Salary = 16,00,000 – (21,600 + 23,076)
Gross Salary = INR 15,55,324
Step 2 : Calculating taxable income
At First, calculate the HRA deduction :
HRA that you can claim = Minimum of (Actual HRA , Rent paid – 10% of basic , 50% of basic for metro city)
=Minimum(3,20,000, 3,60,000 – 10% OF 6,40,000, 50% of 6,40,000)
=Minimum (3,20,000, 2,96,000,3,20,000)
=2,96,000
Taxable Income = Gross Salary – section 80 c deduction – standard deduction – HRA – Professional tax
Income Tax =112500 + 30% of (Taxable Income – 1000000)
Income Tax =112500 + 30% of( 14,02,924 – 1000000)
Income Tax = 112500 + 30% of 402,924
Income Tax =112500 + 1,20,877
Income Tax = 2,, 33, 377
Cess = 4% of Income Tax
Net Tax = 9,333.76 + 2, 33,377 = 2,42,710.76
Step 4 : Calculating in- hand / take home salary .
Take Home Salary = Gross Salary – ( Income Tax + Professional Tax )
Take Home Salary = 15,55 ,324 –(2,42, 710.76 + 2,400 )
Take Home Salary (ANNUAL) = 13, 09,613.76
Take Home Salary (MONTHLY) = 1,09,134.48
SALARY STRUCTURE IN INDIA.
https://cleartax.in/?ref=navbar_static
CTC CALCULATOR 👆
What is the ideal salary structure ?
The following table shows a ideal salary structure , we have put together a table of common components for a salary structure and also added recommended amounts to each components to build an ideal salary structure.
Companies that have employees in more than one country , face a unique set of payroll challenges. International payroll processing automates the trickiest parts of the multinational payroll processes , like helping employees comply with their country- specified wage and hour rules.
International payroll provider , provides expert knowledge and high quality international payroll service across the globe to support your company and co- ordinate your entire payroll operations worldwide.
Overseeing multiply payroll suppliers in multiple languages , combined with the complexities of different legislations in each country, can make co – ordinate international payroll difficult or even unmanageable . Give peace of mind to both your payroll management team and your international employees . By using international payroll service , you will enjoy the confidence that your payroll is legally compliant and running efficiently in each country.
What is international payroll outsourcing?❓❓❓❓❓❓❓❓❓
International payroll outsourcing means that a third party company takes over payroll processing for your company, including administrative functions such as tax reporting, calculating voluntary benefits , and managing employees enquiries.
PAYROLL OUTSOURCING PROCESS.
Now – a – days almost every business are looking to take advantage of international market and work forces.International payroll services provide help business by processing payroll for workers located in other countries. You can use these service and can be assured that your company complies with local tax and hiring laws . Many of them also provide , or connect companies with professional employment organizations for hiring, onboarding and manage foreign employees onsite. Payroll practices vary significantly from country to country , and regulations also are constantly changing . With all these moving parts keeping in mind can become a full time job in itself , but a global payroll provider help you avoid these headache , costs and time associate with expanding internationally.
Here we are analyzing the popular international services and chose the top based on pricing , HR tools, reporting, payment feature, and ease of use. If you need international payroll support , consider our recommendation for best payroll services. With more and more people are working from home , the concept of hiring internationally has really taken-off. But it is not without complications. One of the main challenges of hiring overseas workers and operating across multiple countries is keeping up with the intricacies of global payroll.
PAYROLL OUTSOURCING ADVANTAGES.
Why consider outsourcing international payroll? 📉📊📈
Generally speaking , the payroll process is much more complicated than general people know. In fact producing payroll correctly in every pay period can be a minor miracle. But beyond the average complexity of processing payroll accurately , compliantly and on time , navigating international payroll is fraught with unique challenge. Working with employees in multiple countries require ongoing HR support for managing and resolving issues that come up in a typical pay period , let alone where there is a major technical problem or change in the law. And you ‘ll need to support multiple time zone (possible upto full 24 hours period), languages , regulations and customs where ever global payroll is processed.
Flexible payment options, on- time error free payroll. Worldwide payroll experts who understand the complexities of delivering payroll solution in multiple locations, languages and currencies. You will be confident that your payroll are being run by a team dedicate to provide you with the most efficient service , and taking the hassle out of having employees abroad.
A dedicated payroll service include :
1) Dedicated point of contracts.
2) payroll processing.
3) payslip distribution.
4) Assisting in payroll audit.
5) Country specific reporting.
6) Direct payment to employees.
7) Data processing.
8) Personel and document production.
9) Annual declaration.
10) Tax and social security reporting.
How to outsource payroll?
There is no singular solution for how to outsource payroll . Your needs might look different in different regions- and that’s okay. You can customize a solution that adapts to your needs and budget now, as well as in the future. Here ‘s how to get started?
Understand your motivation and requirements.
The first step in outsourcing payroll is nailing down the “Where, what and why” that are driving your decision.
🔴 Where do you need outsourced payroll services? (Which countries or regions ?)
🔴 What payroll services do you need in those countries? Will you pick and choose? Or would you like a partner to take over the full operation?
🔴 Why are looking to outsource these service? Drivers for figuring out how to outsource payroll often include improving efficiencies and saving money. Some business also need regional expertise to fill knowledge gaps or to handle financial transactions.
2) Consider your long term strategy.
As you define your requirements , don’t forget to consider how your payroll needs may evolve as your business grows.
Does the business have it’s eye on further expansion? If so, make sure your payroll partners can support these locales. Will you need more comprehensive coverage – such as HR support- in some countries down the line ? If so, you should ensure your partner offers a board range of services.
3) Choose a budget.
It is important to understand what investment level you are able afford before researching providers and requesting proposals. You might yourself with some sticker shock – temper it with some healthy dose of reality Consider the cost of processing payroll in house ( including adding staff with required expertise ) compared to the cost of outsourcing some (or all ) of these role.
4) Research providers.
Your search for a provider will turn up a large number of contenders. Some will be large companies , household name of international payroll , who offers deep even complex networks of products and services and vast country coverage. Others may offer deep local expertise in particular region or countries. Expand your research and narrow your list to those providers who not only cover the countries that you do business , now and in future , but also offers local expertise and a strong operating presence where you need it most.
It’s also worth researching each provider ‘s implementation success rate.
Global payroll implementation is extremely complex and requires comprehensive expertise to deliver on time and on budget. Before you add a provider to your shortlist ; make sure you :
🔵Understand their implementation process: detail to ensure consistency and thoroughness.
🔴 Request client referrals to verify implementation success.
You will also want to verify if providers have the unique capabilities you want and need , such as ;
🟡 Shadow payroll.
🟢 Tax filing.
🟠 Money movement services.
5) Request proposals.
Once you’ve gathered some solid prospects , it’s time to start taking a closer look at each – this means a request for proposals (RFP), In this step , you solicit a plan and pricing from each provider on the table.
A successful RFP starts with some internal project planning to determine what resources you have and what you will need from the potential vendor. You should also include an outline of your payroll requirements. At this stage in the process you are not asking for a generalized list of services – you are assessing each provider ‘s ability to meet your specific needs.
There isn’t a magic number for how many proposals you should request – but you should narrow the field down to your best options . Consider focusing on your top three choices.
Creating an RFP can be a tedious process Keep in mind , though , that the quality of your proposal is dependent on the quality of information you provide in your RFP.
6) Decide on the details.
Once you’ve evaluated the proposals and selected a vendor that will be able to meet your criteria, it’s time to hammer out the details . Pore over the contract. Make sure the responsibilities for both partiies are crystal clear and the pricing jives with what was quoted in the proposal.
Then it’s time to sign on the dotted line , rally the troops and launch your project to transition to outsourced payroll.
What can you expect from international payroll provider ?
A single , centrally managed payroll system that offers a fluid and consistent service to every employee, where ever they are.
Services delivered directly by whenever possible.
Access to the lowest exchange rates on the market to make sure you always get the best deal possible.
Foreign exchange solution that reduces costs , improves compliance and increases assurance of payment delivery.
Centralised contracts , reporting data flow and vendor management as option.
Global HR data management and data tracking where needed.
A full-suite international payroll processing system containing a cloud – based multilingual and multi-currency system for employer and employees.
International payroll service can be accessed anytime, anywhere , – allowing you to have complete visibility of payroll data for all employees , no matter where in the world they’re based.
A good global payroll provider operates in every market across the globe, managing the entire payroll process to reduce the burden of the company . So whether you’re just starting out your global expansion journey or are already operating across multiple jurisdictions , global payroll service can help.
How much does it cost to outsource payroll ?💲💲💲💲💲💲💲💲💲💲💲
The cost to outsources payroll varies by contract . Vendor pricing and scope of services are two of the biggest factors that affect pricing -with most contracts working out to some where between $100 – $200 per employee annually.
Each provider structures pricing a little differently, so let’s look some of line item that you might find.
Fees by payroll frequency
The most common fee structure is assessed based on your payroll frequency. If you run payroll every week, the vendor will assess fees every week . For this model your weekly fees might be $1.50 to $3.00 per employee.Plus base fee from $ 25 to $ 40.This fees will be billed weekly per frequency contract.
Per Employee Per Month:
The “per employee per month ” model is a simplified version of payroll frequency model. instead of charging of per employee , fees are given on monthly basis depending on avarage number of employees , result in marginal cost saving for clients.
Fixed Rate:
While many companies prefer to work with fixed rate fees because they provide the greatest amount of control for budgeting, these arrangements typically come with simplistic service packages and are less common with more comprehensive vendor contracts.
Find Right Partner For International payroll Outsourcing.✔✔✔✔
Outsourcing multinational payroll can present great opportunities for companies who realize the strategic importance and prioritize efficiency , local expertise and business intelligence. The key is finding the right international payroll outsourcing partner to help you to reach your strategic initiatives.
BEST PAYROLL SERVICES :👍👍
Papaya Global (Best Overall): Optimal for business that plan to expand their global workforce.
ADP : Ideal for companies with 1000+ employees or those already using ADP solution .
Rippling : Small business that hire and pay international contractors.
Cloud pay: Mid to large business that have a global workforce.
Globalization partners : Business looking for international compliance support and protection of digital asserts.
SAP Success Factors : SAP customers looking to grow their global workforce.
How We Evaluated the Best International Payroll Services :
Starting our research by comparing reputable International payroll services . we evaluate their feature based on criteria such as transparency in pricing, PEO services, HR support, customer support, and payment options. After exploring their offer thoroughly, we scored and ranked the services to narrow the list six best international payroll services.
SGC service is a payroll service provider who belives that an employee is the centre of every company. That’s why their payroll management is designed to take care of all employees related functions while keeping human intervention out of it. It has two perspective – one is employer perspective and other one is employee perspective .SGC uses the unique blend of 3 p s, to achieve this – people , platform and professionalism. Outsourcing of payroll process allows companies to avail the above mentioned with a reasonable monthly cost.
HRONECloud
HRONE PAYROLL SERVICE
HROne helps foreign companies to help in hiring, onboarding, payroll , benefits , taxes and compliance in China. With or without a local company. The primary company policies that are considered while processing payroll include Time and attendance policy, employee pay policy, leave and benefit policy etc. HROne is very few non state owned but fully licenced enterprises service company in China. Their bi – lingual team serves their client with high level quality , compliant method , efficient local execution , tailor made services and cost effective results. HROne is specialized in providing services to small and medium sized foreign companies who want to do business in China.
Papaya Global : scored the highest overall since it provides payroll and PEO services in over 140 countries. It supports all types of workers including contract workers, paying them in their local currency with payslip in their language. This international payroll service is associate with numerous partners that can help employers provide benefits to foreign employers.
Training and IT support may be required for sucessful implementation.
International payroll service can help businesses that are expanding their global workforce . They also help keep companies out of legal trouble by ensuring that local tax and employment laws are followed. If needed they also provide PEO and outsourced HR service locally.
Gusto is a cloud based payroll application that is best suited for small and mid sized businesses. Gusto is also a good solution for accounting firms that offer payroll to clients. Gusto can be accessed from any type of device including desktop. Gusto supports unlimited number of payrolls , and can handle flexible payment schedules , multiple pay schedules , multiple pay rates , as well as garnishments, reimbursements and unlimited bonus and off- cycle payroll. Gusto offers completely automated payroll capability, with user able to set payroll to run automatically for any or all pay periods. Gusto also offers optional HR tools, time tracking capability, employee onboarding , and a benefits option . In addition , gusto also integrates with numerous third party applications. One of Gusto’s best feature is this paperless onboarding process. Which is completed by the employee, allowing them to enter personal and contract information as well as direct deposit details. Truly designed for small businesses , gusto offers three plans ; core , complete , concierge.
Zenefits payroll operates on a multi- currency, multi – territory and multi – jurisdictional basis. Employer services – global payroll worldwide. A professional and dedicated team operating in every major market across the globe , with a knack for helping business thrive and expand. they offer payroll and professional employer organization (PEO) services to business of all sizes in a growing number of over 100 countries and counting.
At Ramco , they are simplifying HR strategy by automating traditional HR transactions and driving business benefits across functions. With their HR and payroll management software , you can focus on your people and not spend time navigating around systems or worry about future changes . Time to re- define employee experience by on boarding ramco global cloud payroll with time and attendance and HR on one platform across the globe.
PAYCHEX
PAYCHEX PAYROLL SERVICE PROVIDER.
PAYCHEX is a robust cloud hosted payroll service provider that manages payroll processing and tax obligations , and provides a host of other HR related services. Paychex has 191 integrations with banks , employees retirement plans , and of course tons of the popular software applications associated with payroll. Paychex is a complete payroll and HR solution designed for larger companies . Pricing is customized based on your needs.
Mynd solution is a organization that works in the tech driven domain where in it offers an all encompasssing and comprehensive platform of service to cater to your complete finance and HR outsourcing needs through their expert driven solutions. At MYND , thr HR outsourcesing services have provision of products automated as a combination based on human intelligence and artificial intelligence products to offer tailor- made solution that cater to the unique needs of every client, irrespective of the size or stage they are in.
When a client opt for MYND HR outsourcing services, they take care of their complete employee administration including payroll, benefits , compliance, and taxes. So that they can focus on growing their business exponentially.
International payroll outsourcing companies , who have employees outside their home country with market related and legal advice and service which enables them to expand or better manage their international workforce.
2) What sort of people use the service?
HR professional as you expect but also Regional Director and line managers who to have an independent source of information.
3) How does the company get the information about contries all over the world ?
Payroll providers should have a network of HR , PAYROLL AND BENEFITS PROFESSIONALS as well as legal advisors.
4) What should be the charge ?
Payroll providers should give firm quote before doing any work.
5 ) Does payroll provider offer several language?
It should be checked that payroll provider using multiple language facility or not. Local language and payslip in local language provide more transparency among workers.
Payroll Management System is one of the most important function of an organization .It works on compensation of employees which contains attendance and leave management , advances , loans, bonuses, tax deductions, stat .compliance in accordance with organization policies. Apart from distributing pay checks to the employees, salary also consumes a lot of time in the areas of payroll management , such as, calculating tax deductions, statutory compliance.
Every time flipping through numerous files to respond to the employees queries is again a time consuming task . Employee for whom monetary salary is the only source of income , imagine what if the salary is not paid accurately or delay in releasing salary .Such irregularities can take a toll on the morale of the employees and ultimately affect the business productivity. While ensuring accurate and timely payment is important , adhering to the various laws and regulation such as labour law, PF, P tax , and other statutory compliance is also critical . Non- adherence with these laws can attract serious legal and financial consequence. To make sure that your employees are happy and you are law compliant , you need to have a proper understanding of what is payroll and how to run payroll effectively.
Term ‘payroll‘ may refer to the workers in a company, plus information about them. It might also refer to the amount of money the employer pays its workers. We often use the term when we are talking about the process of calculating workers’ pay and taxes. I am doing payroll.” … Key benefits of a payroll management system term ‘payroll‘ may refer to the workers in a company, plus information about them. It might also refer to the amount of money the employer pays its workers. We often use the term when we are talking about the process of calculating workers’ pay and taxes. I am doing payroll.” … Key benefits of a payroll management system
The payroll management process , in a nutshell , refers to the process of administration of a company ‘s employees financial records . This should details of the employees salaries , incentives ,bonuses. deductions and net pay. Payroll destination can’t be complete without given description of gross payments ,gross deductions and actual net payout to an employee in a calendar date and noted that these payments and deductions can calculate according to rules and laws which may be differ organizations to organizations and state to state. Payroll can be a means to empower employees and strengthen their relationship with the company. Being paid on time correctly and transparently is intrinsic to the way employees perceive their employers . When payroll information is accessible on demand ,there will likely be fewer queries and any error can be identified sooner by employee.
What is the use of payroll management ?
The payroll management system is a set of process that helps you steamline salaries, bonuses, deductions, taxes and other necessary aspect of net pay and all the employees of your organization. Payroll Management refers to the process by which an employer maintains the salary of employees. It is the administration and management of staff’s
financial reports. It can include base salary, allowance,bonuses,incentives, deductions,PF contribution, and net pay.
WHAT ARE STAGES TO PROCESSING PAYROLL?
A payroll officer needs to do careful planning. There are always ongoing tasks that needs attention and a constant need to monitor changes to withholdings, contribution to social security funds ,etc. The entire process can be spilt into three stages , pre- payroll, actual payroll and post payroll activities.
A payroll PROCESS needs to do careful planning. There are always ongoing tasks that needs attention and a constant need to monitor changes to withholdings, contribution to social security funds ,etc. The entire process can be spilt into three stages , pre- payroll, actual payroll and post payroll activities.
Key benefits of a payroll management system
There are several benefits of implementing a service like this for your business. Some of them have been briefly highlighted below:
Employee morale – By making sure your employees are paid in a systematic and timely manner, you are reinforcing their faith in your business’ financial integrity. This will boost employee morale and motivate them to perform better.
Statutory compliance – This refers to the legal framework your business must adhere to. As an employer, you are required to maintain various payroll and payment records of your employees. Every organisation that hires employees and pays salaries must comply with the labour laws. By having a payroll process in place, you are automatically complying with the employment and labour laws in India.
Manage employee information efficiently – You will be able to accurately store and manage all your employee information in one place. There will be no need to use any additional tool for this purpose.
Core components of payroll processing in India
SALARY
GRATUITY
Housing Rent Allowance (HRA)
Dearness Allowance (DA) – Subject to the city of employment
Special allowance
leave Travel Allowance (LTA)
Maternity leave
ESIC
Provident fund
TDS
P.TAX
BENEFITS etc
What is payroll management course?
The course covered time tracking, payroll processing, procedure, controls and record- keeping .The course also address the Indian payroll regulations and reporting requirements related to compensation, benefits, payroll taxes, and tax remittances. Payroll management courses shows the accountant how to improve the functions of payroll department, enhancing efficiancy and reducing error rates. Topics covered include time tracking ,payroll processing ,procedure ,control and record keeping.The course also addresses the Indian payroll regulations and reporting requirements related to compensations ,benefits ,payroll taxes, and tax remittence It is updated annually for the latest payroll regulations. Payroll Management is idel for anyone new to payroll , or who wants to enhance an exiting system. Earning your payroll certification helps you demonstrate your expertise , advance your career , and enhance your standing within the profession …… set yourself apart from colleagues within payroll profession . Make yourself more valuable to your organization through professional competency and credibility.
PAYROLL TRAINING OVERVIEW.
PAYROLL TRAINING OVERVIEW
THE INSTITITUTE OF PAYROLL TRAINING AND MANAGEMENT
In this course your skill will increase to use payroll programme confidently , you can process any business payroll. Training helps the business conform and employment legislation and data security requirements. lastly , payroll plays the key roll in any organization. So, career in payroll helps you , specialising in a niche field and excellent oppurtunities to touch the sky with a fair amount of income opportunities.
The Institute of Payroll Training and Management popular as IPTM ,Noida was started journey in 2007 , to help students to provide professional education , skill development and training for payroll processing and statutory compliance and direct taxation and certified students as “Payroll Professional” to get opportunities in professional world – in service world and in business. Iptm- helps students to learn payroll from beginning to end . Expert and professional teachers help them to learn end to end payroll processing.
The motto of the institute LEARN, DEVELOP, UPGREAD, GROW, very clearly layout the path for professional growth with slogan “payroll is my passion”.
The institute specializes in developing and updates new areas in professional growth and skill development and delivering them through their unique courses. The institute develops the courses right from concept, develops industry focused/ need focused curriculum and innovative course delivery models, keeping in mind a working professional and new entrants in the profession.
OUR MISSION
We provide career – oriented and professional payroll training of Indian statutory compliance and direct taxation and give certificate to the students , so that they step into the world as payroll professional, The Institute provide both online and off – line courses , with modern chartered environment with the best online training experience from beginning to end:
To provide certified payroll Professional in organization.
To Help every organization to hire or recruit certified member.
To have students every organization in India.
THE INSTITUTE HAS A GREAT VISION
our vision
Being a top ranking payroll institute of choice for students , stuff and corporate, recognized for excellence in payroll Training and certification with the slogan of the institute “The fastest and easiest way to learn Indian payroll and statutory compliances”
INSTITUTE HIGHLIGHTS AND ACHIEVEMENTS.
India’s most preferred institute by the students and working professionals even corporate and excellent experience of long journey from February 2007.
> Classroom learning provides structure and motivation.
>Develop a common payroll language that will optimize efficiencies , avoid costly mistakes and save money.
> Ideal for payroll practitioners and those supporting the payroll industry.
> Providing keep up to date knowledge based for experienced payroll professionals.
> Provide knowledge and skills which required to run advance payroll processing.
ALWAYS ONE STEP AHEAD
The Institute of Payroll and Management popularly known as IPTM was established in 2007 , since then then the institute providing professional education, skill development and training for payroll processing and help students and working people to be certified , so that they can utilize they power of knowledge of payroll processing and statutory compliance and stay one step ahead than other .
IPTM ALWAYS ONE STEP AHEAD
REGISTERED OFFICE AND CHAPTERS
The institute is located in NOIDA-Uttarpradesh(Delhi/NCR) , and has more than 10 chapters in all over india.
MUMBAI
DELHI
KOLKATA
CHENNAI
BANGALORE
JAIPUR
AGRA
BHOPAL……..
What We Do
IPTMis India’s first corporate training and skill development education institute and providing Training in management and Technical skill.
Specialization – payroll.
Indian Payroll Processing .
Indian Statutory compliance.
PAYROLL TRAINING
CLASSROOM TRAINING
Classroom learning provides structure and motivation.
online learning .
choose the self – directed or online instruct -assisted format.
self- study.
IPTM self- study workbook teaches you all essential aspects of usinf excel and payroll software on a day- to- day basis.
self paced training- online .
Are you like the convenience of learning from your own desk, when you need it ? Self- paced training is for you only. providing ability to learn when you are in learning mode, and make you to be as professional as possible.
OUR PARTNERS.
PARTNERS WITH INSTITUTE.
We constantly look for people , who always wanted to contribute through their experience , while making a good business sense.
Our mail id –
Email: iptm.india@gmail.com
OUR PARTNERS
LIST OF OUR PARTNERS
Ninety -Nine Excel Training Academy.
Heyparth Consulting Services.
Justoncall Services Pvt Ltd.
PAYNITI service
IPTM PROVIDES FOLLOWING PROGRAMMES.
Payroll Training Programme.
Practical workshop on payroll processing .
Certified Payroll Professional.
Human Resources Recruitment training.
In- House (Campus – Corporate ) Group training.
Faculty @ IPTM.
IPTM faculty members are active and regular participants in international conferences and practice in payroll. They contributes to international journals and collaborate with a broad range of agencies to develop and execute consultancy projects.
Mr. Ajit Kumar having more than 12+ years of experience in payroll. He is a young payroll professional and associate to public sector in service/education/digital industries. Mr. A Kumar is a renowned personality amongst the followers of Indian payroll Training and Management profession. He has been on the faculty of iptm for addressing corporate seminars / training on payroll management study at various places.
MANAGEMENT AND TEAM
Mr.A.K .Yadav
Mr. Vikash Maurya – Client HR Operations & Marketing.
Ms. Ruchi Dwivedi- Recruitment Training Partner.
MR. Andy Yadav – Client Partner & Recruitment
Mr. Utkarsh Sharma -Consultant & Facilitator.
Mr. Satish Chand – Facilitator & Advisor- india
Mr. Sandeep Kumar – Facilitator & Marketing .
CA Nitin . Khandelwal – F& A
CA Shekhar Sankar – Corporate Trainer
PAYROLL BOOKS :
THE ESSENTIALS OF PAYROLL MANAGEMENT
PAYROLL PEDIA READY RECKONER
The books are “user friendly” and will be found useful by any and everyone dealing with payroll and HR. The books also contain details table, tax rate and formulas, excel formulas and other rates of formulas. SOLID refarence and coverage of all the information that the payroll professional require in their day to day practice.
Helpline timing : 10 am- 8 pm Everyday
Email: ssd@iptm.org.in
Helpline- 91 9667478857.
Contact us:
Welcome to the IPTM institute contact information section . We value your relationship and your satisfaction is important to us. In case you have a queary , please feel free to contact us….
INSTITUTE / NOIDA
113, FIRST FLOOR , OCEAN PLAZA, P-5 , SECTOR 18, NOIDA – 201301 – UTTAR PRADESH- INDIA.
PH:- 91+1204553178
E- MAIL: ssd@iptm.org.in
TRAINING / NOIDA
113, FIRST FLOOR, OCEAN PLAZA, P-5, SECTOR – 18 , NOIDA – 201301- INDIA
Bonus is share of profit earned by a organization in a financial year as per Bonus Act 1965.
A sum of money granted or given to an employee, in addition to regular pay , usually appreciation for work done , length of service , accumulated favors , etc. The bonus amount comes from company’s profit. Start up organizations are exempted from Bonus up to 5 years in case they are in loss. Bonus amount is paid , if monthly Basic + D.A is less than equal to 21000.
Bonus Act 1965 is applicable where number of employees , more than 10.
Bonus payment percentage – (i) Minimum payment is 8.33%.
(ii) Maximum payment 20%
Minimum working days is required for bonus eligibility 30 days in a financial year.
Bonus payment last date 30th November following financial year.
Bonus is fully taxable.
Last date of bonus return submission 31st December.
Bonus can be paid on monthly basis or yearly basis , if it is paid on yearly basis , it is pay on next year.
If company pays the Bonus monthly basis then ESIC is applicable.
What is normal Bonus Amount ?
A company sets aside a predetermined amount ,a typical bonus percentage would be 2.5 and 7.5 percent of payroll but sometimes as high as 15 percent, as a bonus on top of base salary. Such bonuses depend on company profits, either the entire company’s profitability or from a given line of profit amount.
Calculation for Bonus payable:
(i) If the Monthly basic salary is equal to or less than 21000 , then bonus will be calculated on the actual amount using formula :
Step 1. minimum wages of state as per employee skill category and 7000 which ever is lower;
Step 2. step 1 and monthly basic salary whichever is lower but Step 2 should not be less than 7000
Monthly Bonus: Step 2 * (20% or 8.33% whichever is applicable as per from B)
Bonus Annual Return Forms –
INDEX
Rules
Description
1.
Short title and commencement
2.
Definitions
3.
Authority for granting permission for change of accounting year
4.
Maintenance of registers
5.
Annual returns
FORM A.
Computation of the allocable surplus under section 2(4)
FORM B.
Set-on and Set-off of allocable surplus under section 15
FORM C.
Bonus paid to employees for the accounting year ending on the………..
FORM D.
Annual Return—Bonus paid to employees for the accounting year ending on the ……..
Form A – Computation of the Allocable surplus.
Form B – Set-on and Set-off of Allocable surplus.
Form C – Bonus paid to employees.
Form D – Annual Return – Bonus paid to employees.
FORM A
COMPUTATION OF THE ALLOCABLE SURPLUS UNDER SECTION 2 (4)
Name of the establishment………………………… Accounting year ending on the ……………………………
Gross profit for the Accounting year Rs.
Sums deducted from gross profit
Direct taxes section 6(c)
Further sums as are specified under the Third Schedule to the Act
Depreciation under section 6 (a)
Development rebate or Development allowance Section 6 (b)
1
2
3
4
5
Total of sums deducted under Column 2,3,4, and 5
Available surplus for the accounting year(Column 1 minus Column 6)
Amount of allocable surplus @67% (*60% of Column 7)
6
7
8
FORM B
SET AND SET-OFF ALLOCABLE SURPLUS UNDER SECTION 15
Accounting year
Amount allocable as bonus
Amount payable as bonus(in Rs.)
Amount of set on or set-off(in Rs.)
Total set-on or set-off carried forward(in Rs.)
1
2
3
4
5
FORM C
BONUS PAID TO EMPLOYEES FOR THE ACCOUNTING YEAR ENDING ON THE ……………………………….
Name of the establishment ……………………………….
No. of working days in the year ………………………..
Sl. No.
Name of the employee
Father’s name
Whether he has completed 15 years of age at the beginning of the accounting year
Designation
No. of days worked in the year
Total salary or wage in respect of the accounting year
Amount of bonus payable under section 10 or section 11 as the case may be
1
2
3
4
5
6
7
8
Puja bonus or other customary bonus during the accounting year
Interim bonus of bonus paid advance
Deductions
Net Amount Payable(Column 8 minus Column 12)
Amount actually paid
Date on which paid
Signature/thumb impression of the employee
[Amount of income-tax deducted]
Deduction on account of financial loss, if any, caused by misconduct of employee
[Total sum deducted under columns 9, 10, 10A and 11]
9
10
[10A]
11
12
13
14
15
16
Form D
ANNUAL RETURN- BONUS PAID TO EMPLOYEES FOR THE ACCOUNTING YEAR ENDING ON THE …………………
1. Name of the establishment and its complete postal address:…………………………. ………………………………………………………………………………………….. …………………………………………………………………………………………..
2. Name of industry:……………………………………………………………………….
3. Name of the employer:………………………………………………………………….
4. Total number of employees:…………………………………………………………….
5. Number of employees benefited by bonus payments:………………………………….
Total amount payable as bonus under section 10 or 11 of the Payment of Bonus Act, 1965 as the case may be
Settlement, if any, reached under section 18 (1) of 12 (3) of the Industrial Disputes Act, 1947 with date
Percentage of bonus declared to be paid
1
2
3
Total amount of bonus Actually paid
Date on which payment made
Whether bonus has been paid to all the employees, if not, reasons or non-payment
A minimum wage is the lowest remuneration that employers can legally pay to their employees – the price floor below which employees may not sell their labor. Most countries had introduced minimum wage legislation by the end of the 20 th century, because minimum wages increase the cost of labor, many companies try to avoid minimum wage laws by usinggig workers , moving labor to locations with lower or nonexistent minimum wages, or by automating job functions.
What is floor level of minimum wages?
The wage code empowers the central government to fix national floor level of minimum wages (NFLMW),below which no state can set their minimum wages. The code on wages ‘universalises” the provisions of minimum wages and timely payment of wages to all employees irrespective of the sector and wage ceiling.
Under the code on wages , which is yet to be enforced , a National Floor Level Minimum Wage will be set up by the central government to be revised every five years, while state will fix minimum wage for their regions , which cannot be lower than floor wage.
Who fixes floor wages ?
The ministry of Labor and Employment constituted an expert group to provide technical inputs and recommendations on fixation of Minimum Wages and National Floor Minimum Wages. The group has been constituted for a period of three years . It is second such expert committee formed by the Government.
How is the minimum wage calculated in India?
India offers the most competitive labor cost in Asia , with the national level minimum wage at around INR176 per day , which works out to INR 4,576 per month.
This is a national floor level wage – and will vary depending on geographical areas and other criteria.
It must be noted that India’s minimum wage and salary structure differs based on the following factors : state , area within the state based on development level(zone) , industry , occupation and skill – level. This offers foreign investors a range of options when choosing where to locate their set up.
India uses a complex method of setting minimum wages that defines nearly 2000 different types of for unskilled workers and over 400 categories of employment , with a minimum daily wage for each type of job . The monthly minimum wage calculation includes the variable dearness allowance(VDA) component, which accounts for inflationary trends , that is , the increase or decrease in the consumer price index (CPI) , and where applicable , the house rent allowance (HRA).
The calculation of minimum wage factors in the skill – level of the worker and the nature of their work. Broadly , workers in India are categorized as unskilled, semiskilled, skilled and highly skilled.
Nevertheless , since passing the wage code in 2019 , there has been no new development on implementing a national minimum wage for Indian workers.
It must be noted that India”s minimum wage and salary structure differs based on following factors : state, area within the state based on development level (ZONE) , industry , occupation and skill- level.
India uses a complex method of setting minimum wages that defines nearly 2000 different types of jobs for unskilled worker and over 400 categories of employment ,with a minimum daily wage for each type of job.
CATEGORY
UNSKILLED
SEMI SKILLED
SKILLED
HIGHLY SKILLED,
CHART OF CATEGORY OF WORKERS AND THEIR PAY PER DAY IN APRIL 2020
HIghly Skilled: A highly skilled worker is one who is capable of working efficiently and supervises efficiently the work of skill.
Skilled: A skilled employee is one who is capable of working efficiently of exercising considerable independent judgement and of discharging his duties with responsibility. He must possess a thorough and comprehensive knowledge of the trade, craft or industry in which he is employed.
Semi-skilled: A semiskilled worker is one who does work generally of defined routine nature wherein the major requirement is not so much of the judgment, skill and but for proper discharge of duties assigned to him or relatively narrow job and where important decisions made by others. His work is thus limited to the performance of routine operations of limited scope.
Unskilled: An unskilled employee is one who does operations that involve the performance of simple duties, which require the experience of little of no independent judgment or previous experience although familiarity with the occupational environment is necessary. His work may thus require in addition to physical exertion familiarity with variety of articles or goods.
Rate of Minimum Wages Revised for Central sphere Employees.
Category
Above Ground
Below Ground
Unskilled
431
539
Semi-Skilled/Unskilled Supervisor
539
645
Skilled/Clerical
645
752
Highly Skilled
752
840
REVISED MINIMUM WAGE IN 2021
Recommendation of 7th pay commission onminimum wages.
Minimum pay for government employee :
The minimum pay of a new government recruit at an entry level is now Rs 18000 per month. As for a newly recruited class I officer, the minimum salary now stands at INR. 56, 100 per month.
Minimum wage in India is expected to reach 178 INR / per day by the end of 2021, according to Trading Economics global micro models and analysts expectations. In the long term , the India National Floor Level Minimum Wage is projected to trend around 190 INR/ per day in 2022, according to our econometric models.
THINGS TO REMEMBER. List of designation ,category and area can be found in notification number186E, dated 19th january ,2017.
Variable dearness Allowances shall be adjusted by the Chief Labour Commissioner at an interval of six months.
Where in area the minimum rates of wages fixed by this notification are lower than the minimum rates of wages fixed by the state govt for the employee of the aforesaid employment in relation to which the state govt is the appropriate govt. Rates of states shall be imposed in these cases.
The minimum rates of wages include the wages for weekly day of rest.
Area A and area B shall be respectively comprise of all the places as specified in the Annexure to this notification and include all places within a distance of fifteen kilometre from the periphery of municipal corporation or municipality or cantonment board or notified area committee of a particular place.
Government should focus on “Need Based Minimum Wage” covering nutrition, healthcare, education, housing and provisions of old-age. Therefore, guaranteed minimum wage should be treated as a fundamental constitutional right for every citizen of India.
According to the new law, the revision of minimum wages is to be done after every 5 year, which is quite a long period considering the volatility in the market. Therefore, minimum wages should be adjusted to inflation so as to align the wages to market volatility.
The National Commission for Labours should be formed to streamline the issues and challenges of labour market and fixing discrepancies in national level minimum wage computation.
For the minimum wage system to play a meaningful role in aligning protection with the promotion of sustainable growth, it must be properly designed, its goals clarified, and its enforcement made effective. Right now , the organized sector is highly regulated where as unorganized sector is least regulated.
NEED
Minimum wage are accepted globally to be a vital means to both combating poverty and equality crucially ,ensuring the vibrancy of any economy.
In the aftermath of the 2008 global financial crisis , the purchasing power worldwide got eroded.
Criticism
The code lacked consistency in its use of both worker and employer in terms and underlined that since minimum wage is a matter of right for every working person , a common definition of the employee /worker needs to be given in the code. However , in the Bill retained the definition as it is.
The definition of wage is confusing , too long and too difficult to determine what wage is as per this definition.
Provisions for different floor rates for different geographical area will make the concept of a national rate a deceptive play to mislead people.
CHALLENGES
Potential threat from labor official.
Less coverage of code.
Counterproductive for being transparency.
Concentrating on more than one goal.
It is hoped that the central advisory board will come up with appropriate national minimum floor wage for benefit of workers segments.
What happens if any one does not followminimum wage ?
It is illegal for employers to pay employees less than the minimum wage. If any employer violates minimum wage laws – workers can recover the money they owed in a wage and hour lawsuit. If the violation affects numerous employees , a wage and hour class action may be appropriate. In the event of non- compliance , fines ,imprisonment and payment of arrears can be applied as per law. Section 22 of the minimum wages Act stipulates that violaters may be punished to pay a fine (which may be extend to 500 rupees) or imprisonment, which may be extend to a period of six months or both.
Payroll outsourcing to a third party payroll provider – there are a number of benefits to all kind of businesses. outsourcing payroll to a third party payroll service provider means, you are putting your employees payroll to the hands of experts. and you are focusing your mind and expertise only on business and taking advantage of technology and expertise that you may not able to afford in- house.
To run any business smoothly payroll is one of those process that is essential ,but not crucial to sales and business growth. This is why payroll can feel like a drain on work hours and resources – resources can be better spent in money making .Payroll is complex and pay runs need to be made on a regular basis, so this function does not just go away once it is done. While some business opt to handle payroll functions in- house through manual book keeping or do-it- yourself payroll apps , other business owners have come to prefer the expertise of a professional payroll provider. When considering whether to outsource this functions ,the time and resources required to complete essential payroll tasks often weigh heavily in the decision making process. Question may arise that how payroll outsourcing help your business to develop? Since payroll and tax responsibility can be time consuming and complicated – yet essential , busy owners are increasingly looking to outsource this functions. Some common benefits of payroll outsourcing, areas of your business where a provider may be able to help, and how this approach could make sense for your business. The benefits of outsourcing your payroll means that you can :
Common time – consuming payroll and get accurate, complaint payroll on time, every time
Save on cost.
Potential time saved.
Enhanced security of payroll data.
compliance with government regulations.
Payroll expertise
Employee self service features.
Expert service only a call away.
Payroll processing is indeed a brain storming process ,Outsourcing payroll can free up staff to persue other important value added and revenue generating activities.
Save on cost ; The direct cost of payroll processing can be greatly deducted by working with an efficient payroll provider . Moreover cost saving for the company on outsourcing payroll processing is excrtimingly significant and it can go up to 500%at times also.
3 Potential time saved .- No matter how many employees a business has , processing payroll demands time and attention to detail. This often comes at the cost of valuable times that could otherwise spent on more pressing business priorities, such as building revenues or serving customers. By outsourcing payroll to a reputed provider , owners have more time to focus on what matters most to them. In many cases , they will also have a variety of option available to maximize time saved throughout the pay period .Additional tasks , such as new hire reporting or benefits administrations, can be easily added into the outsourcing mix, and business owners can specify how often they would like to be contacted regarding payroll related tasks. If there are not any discrepancies or problems , payroll providers will likely only need to reach out once per pay period to notify owners that payroll has been processed successfully. Once a businessman has hired its first employee, payroll responsibilities will continue every pay period. As noted above , the complexities of payroll processing require a significant time commitment on a daily and weekly basis – time you cannot make up elsewhere. Whether it is calculating payroll amounts , generating in – house report preparing and remitting state and central payroll taxes and returns, or simply printing , signing, and distributing pay checks, the demands on your time can be costly. Management can focus more on dealing wealth pivotal business issues instead of nitty gritty issues. This in turn help in saving time and energy which can utilized for better use.
4 Enhance securities of payroll data – Payroll processing is a complex and potentially risky business operation . Even with trusted partners , there is always a risk of identity theft, embezzlement, or tampering with company records for personal gain.
Outsourcing payroll to a stable, experienced provider can offer a “safe haven” for your confidential payroll data. In addition to redundant back up and multiple server locations ,a quality payroll provider invest instate-of – art systems for storing and protecting data, simply because it is part of the service provided to clients.
5 Compliance with government regulations – Business understand how critical compliance is in their operations, and peace of mind with regulations is very important. Whether you have three employees or thirty , having to track every empoloyee’s pay rate, hours and employee status can br stressful and can possibly lead to in accuracies. Additionally understanding employee deductions for central and state, qnd local taxex- as well as programs like social security and medicare – can be challenging. These taxes must be set up correctly before employees are initially paid.
When you outsource payroll , you can simply these process and streamline all your employee and payroll information ,Although business owners are ultimately responsible for meeting payroll accuracy and tax filing requirements, having a provider on hand often helps them feel more confident about staying up- to – date on regulations . Government rules and regulations often change , and small business owner cann’t always stay on top of the latest requirements. Professional payroll providers on the other hand ,are obligated to stay current with rules and regulations, and changesin tax rates for all geographic locations.
6 Payroll expertise – A professional payroll company employs individual who knows payroll processing inside and out. These individual specializein the complexities of payroll processing and taxes,as well as complience with government regulations. It’s why they are trained to do and paqrt of the guaranteed service they provide.
Reputable payroll processors bring expertise in the following areas :
i) Knowledge of regulation and integration with payroll deduction .
ii) Updating forms and adjusting accurate tax deductions.
iii) Managing voluntary and involuntary employee withholding and submitting them to the proper government entitles and benefits programs.
iv) Calculating and submitting quarterly and year end payroll taxes.
v) Mantaining eligibility for tax credits and minimizing amount owed.
vi) Tracking employees benefits eligibility dates and processing benefits.
vii) Updating central , state tax guideline and adjusting payroll figure as needed to maintain compliance.
Payroll experts are also very good at verifying accurate data, finding mistakes ,and correcting them before it becomes an issue. Many companies offer benefits to their employee contributions must be deducted from payroll .If your company offers multiple healthcare plans, each with different contribution amount , managing these figures can become quite complicated . These contributions can further impacted by am employee ‘s status( singlevs. married, dependents vs. none, etc.)as well as their salary level.
During the benefits enrollment period,employees may have the option to register for multiple typesof benefits
;health insurance, life insuranceamd more.Each of these requirs separate contribution amount for both the employee and the employer to ensure the benefit programme stay active and properly funded. Outsourceing payroll helps ensure that your deductions are aligned, that what you ‘re offering complies with regulatory guidelines , and that payments to payroll companies can provide an integrated benefits platform that allows a business owner to easily add and remove employees from the benefits programs, properly calculate the amounts deducted from each paycheck, and provide benefits information directly to the employee without requiring the owner to handle individual employees benefits issues directly .
7 Employees self service features.- Having an integrated payroll platform with employees self service options saves time and money by allowing them to handle common tasks on their own, including ;
submitting time – off request.
Printing tax documents
Completing on boarding paper work.
Updating benefits and tax allowance forms.
Swapping shifts.
Updating personal contact information .
When these key business functions are outsourced , mant reputable payroll providers will also offer mobile application and remote access for employees self service .
8 Expert service only a call away – Outsource payroll experts are always available at your beck and call. So you don’t need to keep a close watch on the constantly changing rules . Also you are free from updating your latest payroll software. Manual payroll is a headache and many times becomes a nightmare in worst cases . Business owner who outsource payroll curtail a tiresome source of personal pain.
BEST PAYROLL SERVICE PROVIDER COMPANIES.
ADP is the largest and probably best- known payroll processing company. Ramco also provide End-to-End payroll needs of large scale organizations. Some well known payroll provider are following
It depend on number of hours involved in services and the scope of work you ask to service provider. payroll services can starts as low as INR 2000 , depending on your requirements. It also varies from city to city , in Bangalore the rates start from Rs. 100/- per person, monthly , subject to negotiations.
