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Payroll

Payroll Outsourcing Services in India

Benefits of Outsourcing Payroll

Payroll outsourcing generally includes all activities related to payroll processing and other payroll-related functions. Payroll processing includes several activities like maintaining employee records, calculating employee salary and wages, computing and adding bonuses, distributing payroll, generating payroll related reports and complying with the taxation laws of the government.

Payroll of a company refers to the payment of employees. It encompasses the sum of all the financial records of salaries for an employee, bonuses, taxes as well as deductions. From an accounting perspective, a payroll refers to the amount paid to the employees for the services rendered by them for a certain period of time.

Payroll is simply the use of a service provider to handle administrative and compliance functions of paying employees. It is important to note that payroll service are only that, and do not offer a local employer of record for the foreign company.

What Exactly is Payroll Outsourcing?

  • Frees up both time and resources allowing businesses to focus more on core tasks.
  • It reduces costs and risks involved.
  • Gives businesses access to the latest technology and expertise to perform payroll functions well.

Payroll Outsourcing and HR Administration Services - BPiON

Payroll outsourcing in a business means engaging an external party to handle all payroll related activities. Outsourcing of payroll functions is generally done to reduce cost and save time required to deal with financial tasks related to a payroll. Hiring an external firm to handle payroll activities means a business organization can do away with the need to hire and train a large in-house payroll staff, buy appropriate software package for payroll functions and remain constantly updated about complicated tax regulations.

Outsourcing of payroll activities is beneficial for all kinds of businesses, regardless of the organization having a large payroll or a mid-range or small.

Outsourced payroll solution provide increased accuracy when compared to in – house payroll management as it gets prepared ,analysed and evaluated by qualified professionals. Frees up both time and resources allowing businesses to focus more on core tasks. It reduced costs and risk involved.

Here is the list of advantages for outsourcing payroll services.

Time Saving

Handling payroll function is no cake-walk. Payroll department has to look into several intricate and minutest of details such as new hires, terminations and benefit deductions to name a few. Plus, any changes in central and state regulations just makes it even more complicated.

Managing payroll internally is quite a taxing task and each year organizations doing so end up consuming precious labor hours in preparing W2s. Outsourcing payroll accounting to a professional firm unburdens you from worrying about these

Outsourcing payroll accounting to a professional firm unburdens you from worrying about these time-consuming tasks requiring 100% precision. It also frees up your HR department’s time which can be utilized for core functions which are strategically more important for your business.

Strategic resource management is one of the reasons, organizations prefer to outsource payroll accounting, which gives them a competitive edge as well. Simply because payroll is not a one time thing. One payroll period follows another and the working hours in between never seem to be sufficient.

Avoid Internal Revenue Services (IRS) Penalties

Each year numerous small and big businesses end up paying heavy IRS penalties. According to the Internal Revenue Service department, on an average the penalty amount paid because of incorrect or delayed filings . Payroll mistakes are not to be taken lightly, because while this can upset your employees, filings with omissions or incorrect details raises a red flag. These mistakes lead to undesirable events such as heavy penalties and even audits.

Besides, it’s almost impossible for a small enterprise to be on the ball with the latest changes in central and state tax regulations.

Since professional providers have to stay abreast with all central and state regulations all the time, they can manage calculations and filings with utmost ease at a very nominal cost which if you managed otherwise, would cost you several labor hours and penalties.

Cost Reduction

As a business you can save several precious rupees by outsourcing your payroll function. This is particularly true if you happen to be a small or medium sized enterprise. Established enterprises with a larger work-force can afford to have an in-house payroll department, but if you are a small business with limited resources and small work-force, you must seriously consider outsourcing your payroll function to a professional and reputed payroll service provider.

If you compare the expenditure of doing payroll in-house to outsourcing it to a professional payroll service provider, you will realize that a good amount of money can be saved. Imagine the activities your in-house payroll executive will have to take care of and the amount you will end up spending.

Few of the activities are payroll calculation, signing and distribution of checks, payroll software purchase price, calculation of taxes and returns, reporting of new hires and terminations and training & support.

Since time is money, as a small business owner or start-up, it’s costlier for you. This is the reason that many small and middle sized businesses make a smart move by outsourcing their payroll function to a payroll firm.

Increased Security

Payroll processing is quite complex a process which involves loads of monitoring due to inherent risks involved. Theft of personal information can cost you a fortune. Yes, your employees are trustworthy; however, it requires extensive monitoring and security.

Without appropriate measures of security, tampering with company information and abstraction of funds may come about which again can incur pretty heavy losses. Payroll service providers are liable to have such measures in place. With state of the art technologies in place, timely alerts are raised in case of any payroll fraud which reduces the need of 24×7 manual intervention.

Data storage and protection measures, multiple server locations and backup facility ward off any potential possibility of payroll fraud.

Providers usually invest heavy amounts of money to have such avant-garde measures in place which is not possible for you to have in-house if you are a small business. Manual bookkeeping cannot help prevent fraudulent activities like these technological systems can do. Hence, outsourcing payroll function to a vendor is a smart move .

Professional Team Of Experts

Outsourcing payroll accounting gives you access to professional team of experts who study and research a lot about government regulations. Renowned payroll service provider agencies have an experienced team of experts who can manage benefits and deductions in payroll system.

Besides, workers compensation, addressing employees concerns and human resource in general are taken care of pretty well by the team which is an added advantage for you as a business.

While searching for a good payroll service provider, you should also find out if they have a 401k plan to offer. These transactions are an inextricable part of system and hence the inclusion of the plan will take you a long way.

No Infrastructure or Maintenance Costs

In-house payroll management means investing in paid software plus upgrade costs. Since you need the latest tax tables installed on your systems all the time, that’s an extra time and money consuming strenuous activity, you can’t evade; however, by outsourcing you can say goodbye to these maintenance and infrastructure cost woes with utmost ease.

Also, as discussed earlier it also eliminates the possibility of incorrect filings leading to penalties.

Direct Bank Deposit

Employees working in small scale companies always want direct bank deposits to be made; however, for small companies it is quite difficult to do so.

They have to roll out paper checks every month and also have to manage plenty of paper work to keep a record of rolled out payroll checks. Outsourcing payroll allows you to eliminate plenty of paper work and also eliminates the possibility of any fraud. It’s also less time consuming and error free which makes life easy for small enterprises.

No Risk Of Losing In-House Payroll Employee

Outsourcing payroll functionality will help you streamline payroll process without much complication. Also, an overworked payroll employee doing multi-tasking may quit his/her job anytime and walk out with the knowledge acquired during the tenure.

The risk always looms large particularly on small businesses relying on an employee to manage multiple responsibilities. Outsourcing payroll accounting to an outsourcing service provider relieves you from this stress. Also, output in terms of quality and accuracy will always justify your investment giving you ROI manifold.

Robust Human Resource Management System

Having a robust HRM system is essential for any enterprise today. Outsourcing your payroll accounting equips you with a robust human resource management system offering faster processing of information and better employee management than an in-house manual human resource management system.

Choosing right payroll service provider can give your firm a competitive edge.

A Payroll Service Provider Includes :

A payroll service provider is a company that automatically processes payroll calculations, payroll tax statements, year-end taxes and more. Many employers prefer to use payroll service providers to help ensure their employees and taxes are paid accurately and on-time.

The payroll outsourcing services have provision of products automated as a combination based on human intelligence and artificial intelligence products to offer tailor-made solutions that cater to the unique needs of every client, irrespective of the size or stage they are in.


Outsourced payroll services providers have a team of experts doing things for you. This will ensure accuracy in processing large payroll. 


 Saves Time:
In-house payroll processing is a time-consuming method. Payroll processing tasks such as maintaining records of benefit deduction, fresh hire, and termination and central as well as state regulatory changes are frustrating tasks. Every year a large number of hours are wasted in preparing and sending wage and tax statements. Outsourced Payroll Companies lets employers focus on their key tasks and frees up the time of the business owners as all the tasks will be taken care of by outsourcing payroll companies.
 

Hassle-Free: 
You do not need to bother about remembering deadlines or whether you have processed the payroll on time. Payroll outsourcing companies will do all this for you. Also, the amounts to be paid towards the liabilities too will be informed to you. It gets tough as an employer to make and keep tracks of deductions .In this case, a provider can look after this for you. With the total physical response unrelentingly focusing on pensions, to have someone to take care of this admin function would be good. 
 

Human Relations: 
Payroll is not just about pay as you earn and payments. There are welfare benefits too which have become interlinked as the department for work and pension does monitor things via RTI. Not having one’s PAN and adhar linked to the payroll can lead to misreporting of information and can stop or reduce an employee’s benefit payments. Considering this it is for the employee’s benefit to have things treated from their perspective. Also, for queries regarding holidays whom better to approach than your payroll provider? 
 

Queries:  
Your employees might wonder why you have made a deduction or why the amounts of holiday pay or gross pay do not add up to what they have computed. Well, in such cases you could simply forward their queries to your payroll outsourcing company.
 

Audits: 
If you have a surprise national minimum wages compliance check or any such attentions ,it is always worth your weight in gold to know that you were doing things as you should have. Negative publicity on the accounts front or needless penalties or tribunal hearings are not things that anyone wants.
 

Statutory Payments: 
You can reclaim 103% on your symmetric multiprocessing payments if you fall in the right category. However, the right reporting and information are required. Also, you need to keep records. The same applies to Statutory sick pay in which you can even make reclaims for COVID 19 cases. Thus, it pays to be well informed by an expert.
 

Compliance Issues: 
There are frequent updates and changes that occur in the legislation. This makes things difficult for most employers to keep up with. For instance, the personal allowance for the year 2020-21 is the same as the tax year 2019-20. Thus, it makes sense to have someone else tackling these things for you.


Software: 
You do not need to invest in expensive payroll software or bother about printing payslips as your outsourced payroll provider will do this for you.

Outsourcing Payroll Services Disadvantages:
You cannot merely hand someone the work of processing payroll and not co-ordinate with them. You need to treat your payroll provider like your inhouse employee and give them all the necessary help and support so that you get what you want as you want it. 
 

Deadlines: 
Be realistic as to deadlines as just providing information an hour ago and expecting your payroll to be wrapped up within a few hours could be detrimental. Pressure might lead to possible bits of information being left out so give yourself time to collect all the information before sending and ensure you have a glance at what you receive.

Therefore, there are more pros than cons of outsourcing payroll services however, just because someone is handling your payroll does not mean that you can completely abstain from responsibilities in relation to handling your payroll. Outsourced payroll services will help in saving your time and money but you need to bear in mind that there can be a few teething problems that can be easily dealt with.

Outsourcing payroll is a limited, administrative foreign employment solution, and does not guarantee compliance with taxation, immigration or labor laws in the host country.  The international payroll provider does not offer the foreign company a local employment entity, so incorporation is still required along with registration and other compliance measures.

Other practical disadvantages include losing control of compensation and employee data, security issues and lack of service quality or timely reporting.  These can be offset by thorough research of the payroll providers in the country and selecting the best firm available.

Predicted growth of payroll outsourcing market in India

Benefits of Outsourcing Payroll Services in India - PionHR By SGCMS

Outsourcing payroll is a limited, administrative foreign employment solution, and does not guarantee compliance with taxation, immigration or labor laws in the host country.  The international payroll provider does not offer the foreign company a local employment entity, so incorporation is still required along with registration and other compliance measures.

Other practical disadvantages include losing control of compensation and employee data, security issues and lack of service quality or timely reporting.  These can be offset by thorough research of the payroll providers in the country and selecting the best firm available.

Payroll has evolved into more than merely processing payslips. This means that just having your employees paid on time is no longer enough. You need to see that you generate and submit the necessary details and make the correct pay as you earn payments on time. Because of these factors, many prefer to outsource payroll services. But is that something which is going to work for you? Let’s discuss things.

The global payroll solutions market is expanding at a very good pace. It is predicted that the global market for payroll outsourcing will reach USD 162 billion by the end of 2021. India being a big player in the outsourcing market is also following the global trend.

Payroll outsourcing is a major player in the Indian outsourcing market. With the continuous growth in the payroll outsourcing industry in India, the payroll solutions industry is also expanding in a big way. According to a recent report the Indian payroll outsourcing market will witness a marked growth in the coming years. The market is predicted to increase by almost 50 per cent in the next five years.

Companies and organizations today are looking for time saving and cost effective measures to run their business smoothly. They are opting for cost reduction at various levels and focusing on outsourcing certain jobs that will provide them with the opportunity to focus on core issues of the business single-mindedly. Payroll is one such area that is generally outsourced to reduce the complexities of having to deal with payroll related activities in-house.

Another thing to note is that with the growth of the payroll solution market in India new players are entering the arena. This will mean an increase in competition, which will result in improvement in quality of outsourced payroll activities.

Thanks for Reading.

Rupa Banerjee – Payroll Editor

Email : rupabanerjee70@gmail.com

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Payroll

Gratuity Forms Payment of Gratuity (Central) Rules, 1972 : All that you Must Know

GRATUITY IS A SMALL MONETARY GIFT GIVEN IN APPRECIATION FOR GOOD SERVICE. FOR EXAMPLE : A CASH GIFT GIVEN UPON RETIREMENT.

#What is Gratuity?

Gratuity is a lump sum amount paid by the employer to the employee as a token of appreciation for the services they have provided towards the company.

Gratuity payment is retirement benefit like the provident fund or pension , intended to help them after retirement ,whether the retirement is the result of superannuation or physical disability. General principal behind gratuity is that the length of the service of the workmen is to be considered to claim a certain amount as a retrial benefit, and it is given by the employer to an employee for the services rendered by him or her during the period of employment. Gratuity act name is The Payment of Gratuity, 1972 (Rules and Act).

Gratuity Act applies to industries and organisations all over India in case employer having 10+ working employees and every employer shall be Gratuity to eligible employee as follow the rules that why it’s also called statutory compliance.

Who is eligible for gratuity?

Gratuity payment eligibility comes after the employee has completed a minimum of 5 years and Gratuity payment to employee at the time of leaving, retiring (58 years) or is dead. A person is eligible to receive gratuity only if he has completed five years of service with an organization. These five years must be continuous and there should not be any gap in the services of the employee with that company.

Employee who has completed 5 years of continuous service with a single employer is eligible for gratuity payment but this payment will be paid by employer when employee shall left the organization. Gratuity services period shall be calculate from date of Joining (DOJ) to last day of working (DOL) without reducing maternity leaves and any other loss of payment or LWP days. The following rules apply to the calculation of 5 years as continuous service:-

Years and MonthEmployer Week Days Working
4 Years and 8 months (240 Days) period shall be count as 5 Years [Case Study, judgement Copy]Where, 6 days working in a Week.
4 Years and 190 Days period shall be count as 5 Years [Case Study, judgement Copy]Where, 5 days working in a Week.
In case, the employee has completed 6 months after eligibility of gratuity then 6 months tenure would be counted as a year.FOR ALL
GRAUITY ELIGIBILITY

Change in gratuity rules According to the New Wage Code Bill 2021, employees will be entitled to gratuity even if they have been employed for just one year. However, right now, employees are getting gratuity after five years of continuous work in the same company.

WHAT IS GRATUITY IN SALARY?

Gratuity is the monetary amount which is payable to the employee of an organisation under the Payment of Gratuity Act 1972. This is mainly paid to the employee as a token of appreciation for his/her services towards the company. Gratuity payment is one of the several components that make up the gross salary of the employee.

All You Need to Know About Gratuity

However, an employee is eligible to receive the gratuity amount only after they complete a period of 5 or more years with the company. It is generally a token amount paid by the company showing gratitude towards the employee for their services towards the organisation.

How to calculate Gratuity ?

Gratuity calculation for monthly rated, piece rated and seasonal employees under Payments of Gratuity Act 1972: Payment of Gratuity is a ‘Defined benefit’ provided to an employee as a lump sum, on his retirement. To put it simply, gratuity is the money given to an employee in recognition of his services as a parting gift. The provisions of payment of gratuity are governed by the Payment of Gratuity Act 1972. The maximum amount of gratuity that can be paid to an employee is Rs 20 lakh. The employer can, however, pay more gratuity than the prescribed ceiling. The payment of gratuity is made either to the employee at the time of his retirement, or termination or to the legal heir in case of death of the employee.

TAXATION RULES ON GRATUITY

The taxation rules on gratuity depend on the type of employee who is receiving the gratuity.

1. The amount of gratuity received by a government employee is exempt from the income tax.

2. Any eligible private employee of an employer who is covered under the gratuity act gets tax exemption on a certain amount of salary.

  • ₹20 lakh
  • The eligibility criteria
  • The actual amount of gratuity received

FORFEITURE IN GRATUITY – The employer is allowed to forfeit the grauity in case following offence is committed during the employment:-

His/ Her lawless act.

Violent behavior

Any disorderly conduct.

Any offense involving moral turpitude.

The Payment of Gratuity Act 1972 doesn’t apply to central or state government employees and other employees covered by any other act for Gratuity payment. The “Employee” under the Payment of Gratuity Act 1972 means any person employed on wages for doing any type of work, including those hired in the managerial or administrative capacity. The key consideration for gratuity payment is that the person should be employed on wages. Those employed as apprentices are not eligible for gratuity.

#Gratuity calculation formulas

Gratuity payment always calculate for year(s) NOT FOR MONTHS AND DAYS and Gratuity will be calculate on last month’s salary. Last month salary means, Last month Basic Salary + DA. It also called Gratuity Salary or Gratuity Wage.

Gratuity Calculation Formulas = Last Drawn Monthly Salary / 26 x 15 x Number of years of service completed.

1 Year Gratuity amount equal to 15 days monthly Basic Salary means. Calultion

The gratuity under the Payment of Gratuity Act, 1972 is calculated as 15 days’ wages for every completed year of continuous service, based on the last drawn salary. Thus, the gratuity calculator formula as percentage of salary works out to be:

Total Gratuity Payable = (Last Drawn Monthly Salary) x (15/26) x (Number of years of service completed).

For example, if you joined service in 2013 and resigned in 2018 with a monthly salary of Rs. 50,000 (in 2015), your gratuity will be calculated as follows: – (15/26* Rs. 50,000)*5 = Rs. 1,44,230.

Note: Although there are 30/31 days in most months of the year, the number of days in a typical work month specified under the Payment of Gratuity Act, 1972 is 26 days. Thus, 26 days is used in the formula for calculating gratuity

Maximum limit of the gratuity payment is 20 lacs (2000000). This limit for an Employer as per Gratuity Act. Same time, Gratuity payment is non taxable income in hand of employee and tax free gratuity payment limit is also 20 lacs (2000000) but this limit for overall period of employments in Private Sector.

GRATUITY FORMS

Payment of Gratuity (Central) Rules, 1972
1.Form A Rule 3(1) : Notice of opening
2.Form B Rule 3(2): Notice of change
3.Form C Rule 3(3) : Notice of closure
4.Form D Rule 5(1) : Notice for excluding husband from family
5.Form E Rule 5(2) : Notice of withdrawal of notice for excluding husband from family
6.Form F Rule 6(1) : Nomination
7.Form G Rule 6(3) : Fresh Nomination
8.Form H Rule 6(4) : Modification of nomination
9.Form I Rule 7(1) : Application of Gratuity by an Employee
10.Form J Rule 7(2) : Application for gratuity by a Nominee.
11.Form K Rule 7(3) : Application for gratuity by a Legal Heir.
12.Form L Rule 8(1)(i) : Notice for payment of gratuity
13.Form M Rule 8(1)(ii) : Notice rejecting claim for payment of gratuity
14.Form N Rule 10(1) : Application for direction to controlling Authority.
15.Form O Rule 11(1) : Notice for appearance before the Controlling Authority
16.Form P Rule 14 : Summons to appear before Controlling Authority.
17.Form Q Rule 16(1) : Particulars of application under Section 16
18.Form R Rule 17 : Notice for Payment of Gratuity
19.Form S Rule 18(8) : Notice for payment of gratuity as determined by Appellate Authority
20.Form T Rule 19 : Application for recovery of gratuity
21.Form U Rule 20 : Abstract of the Act and Rules
GRATUITY FORMS,

FAQs on Gratuity Payments
Ques: When can an employee ask for gratuity?
Ans: An employee can ask his/her employer for the payment of gratuity upon completion of 5 continuous years of service.

Ques: Which salary is considered while calculating gratuity?
Ans: While calculating gratuity, the last drawn salary of the employee is taken into consideration.

Ques: How much amount of gratuity is free from tax liabilities?
Ans: During the entire working career of an employee, the maximum that is exempt from any tax deductions is Rs.20 Lakh

Ques: What is the formula for calculating gratuity?
ns: Gratuity can be calculated using the formula- (15 * last drawn monthly salary * tenure of working) divided by 26; where 26 is taken as the number of working days per month.

Ques: How much percentage of gratuity will I receive monthly?
Ans: An employee can receive a maximum of 57.69% of the monthly salary as gratuity. To know the exact amount of gratuity, you can use the Gratuity calculator.

Ques: Can an employer give excess gratuity to the employee?
Ans: Yes, an employer can give excess gratuity to an employee. However, this excess amount will be a part of the employee’s taxable income.

Thanks for Reading.

Rupa Banerjee – Payroll Editor

Email: rupabanerjee70@gmail .com

Categories
Payroll

Payroll calculation in India , Salary break up and Deduction.

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Payroll can be defined as the process of paying a companys” employees.

It includes collecting the list of employees to be paid, tracking the hours worked, calculating the employees pay, distributing the salary on time, and recording the payroll expense.

In order to get this done , there is tons of background work involved because payroll is more than just about calculating paychecks .It is an intricate set of process which requires different teams to work in tandem, But all this complexities can be managed effortlessly by the standardization of processes, selecting the right service delivery model, and using modern technology to manage payroll operation.

Steps involved in completing to payroll.

  1. Onboarding employees to payroll.
  2. Defining your organizations pay policy.
  3. Creating your salary components for all compensation structure.
  4. Collect payroll input from employees and dependent items.
  5. Compute the salary to be paid for all employees.
  6. Distribute authentic payslips, and tax worksheets.
  7. Compile tax reports.
  8. Complete tax filing for all the statutories (PF,LWF,ESI,TDS)

3 STAGES TO RUN INDIAN PAYROLL

Stages to process Payroll in India

Stages of Payroll

Leave and attendance data : To accurately process payroll , one of the most important activities in payroll is calculating the time that an employee has invested in a given pay period. Attendance data is the key input for processing payroll as almost all the other calculation based on it. Any error at this step will inveriably lead to wrong calculation of employee”s compensation, causing employees dissatisfaction. For the HR departments too, it is a time consuming activity. Along with attandance , it is also important to track whether the employee is spending the stipulated amount of time at work.

Data requirements to run a payroll

person holding fan of 100 us dollar bill
PAYMENTS AND DEDUCTIONS

Payments and deductions:

One more set of most crucial data to be collected as part of pre payroll is the information regarding payments and deductions to be made to employees. Payments and deductions data for the specified period helps how much to be paid as salary to a particular employee.

Income tax information: According to section 192 of Income Tax Act , the employer is responsible for deducting income tax (tax deducted at source) while paying salaries to the employees. This deduction is based on the estimate of the income that will be earned in the particular financial year and the applicable tax rate.

As most employee make investment to save tax , organization ask their employees to declare their investments at the start of the financial year. Based on this declaration of tax saving investments, the organization calculates the taxable income and the projected tax , which the employee is liable to pay the financial year. This tax then deducted on monthly basis as tax deduction at source.(TDS).

New joinees

Anew joinee needs to be added with all data records (such as PAN NO,Address information,dependent information),salary structure and benefit deductions.To allow accurate calculation of taxex , you also need to capture prior salary informatio through Form 12B.

To allow that payroll calculations for new joinees is accurate and does not disrupt the process for all other employees , identify a cut off date, post which you will not include the new joinee in the current months” payroll.

Data validation before actual payroll process :

Data validation is the most foremost step of pre- payroll ,which cannot be avoided regardless of any cost. The collected data is checked for accuracy and correctness before using it in the actual payroll process. It is important to confirm that the background work done so far as part of pre payroll is error free to ensure that the sub sequent activities of payroll run smoothly. Inaccurate data can menance the entire payroll process.

Exits:

Many companies stop the payroll run for employees who have handed in their resignations .This is tricky – especially in cases where employees just stop coming to work post the pay period end date. (eg. absconding employees ).But can be achieved if we saparate the payroll processing and disburse processes.

Validation is a proactive step in the sense that it eliminates the risk of committing mistakes in payroll and the consequences faced while retifying them later.

Arrears:

An employee’s salary may have changed in a prior period because there was a delay in the performance increment cycle .

The salary changrs will need to be paid restrospectively and this calculation is called Attear calculation. The calculation will include additional income, increased tax and deductions.

Let us now discuss common salary components:

Basic salary

Basic salary is the base income of an individual. It is a fixed part of one’s compensation package.

A basic salary depends on the employee’s designation and also the industry in which the employee works.

Gross salary

Gross salary is the amount calculated by adding up one’s basic salary and allowances, before deduction of taxes and other deductions. It includes bonuses, over-time pay, holiday pay, and other differentials.

Gross Salary = Basic Salary + HRA + Other Allowances

Net salary or take-home salary

Net salary or take-home salary is obtained after deducting income tax at source (TDS) and other deductions as per the relevant company policy.

Net Salary = Basic Salary + HRA + Allowances – Income Tax – Employer’s Provident Fund – Professional Tax

Basic salary

Basic salary is the base income of an individual. It is a fixed part of one’s compensation package.

A basic salary depends on the employee’s designation and also the industry in which the employee works.

Gross salary

Gross salary is the amount calculated by adding up one’s basic salary and allowances, before deduction of taxes and other deductions. It includes bonuses, over-time pay, holiday pay, and other differentials.

Gross Salary = Basic Salary + HRA + Other Allowances

Net salary or take-home salary

Net salary or take-home salary is obtained after deducting income tax at source (TDS) and other deductions as per the relevant company policy.

Net Salary = Basic Salary + HRA + Allowances – Income Tax – Employer’s Provident Fund – Professional Tax

Allowances

An allowance is an amount received by the employee for meeting service requirements. Allowances are provided in addition to the basic salary and vary from company to company. Some common types of allowances are discussed below:

  • HRA or House Rent Allowance: It is an amount paid out to employees by companies for expenses related to rented accommodation.
  • Leave Travel Allowance (LTA): LTA is the amount provided by the company to cover domestic travel expenses of an employee. It does not include the expenses for food, accommodation, etc. during the travel.
  • Conveyance Allowance: This allowance is provided to employees to meet travel expenses from residence to work.
  • Dearness Allowance: DA is a living allowance paid to employees to tackle the effects of inflation. It is applicable to government employees, public sector employees, and pensioners only.
  • Other such allowances are the special allowance, medical allowance, incentives, etc.

Reimbursements

DEDUCTIONS

This is where real work towards reaching the net compensation of employees happens, in the way of finishning the pre-payroll activities .This is the time when accumulated payroll data ( Leave & Attendance data , shift wise calculations, Tax and Deductions ,Expenses, Incentives) during pre-payroll should run.

Structuring salaries in an inevitable task for every HR and Payroll professional . Despite the importance of the activity , professional are often uninformed of the technical and best practices of a drafting a complete and efficient salary structure.

Through this article we will look atvthe various components of a salary, what they mean and how you can use them effectively.

components:

BASIC FULLY TAXABLE.

DA FULLY TAXABLE.

MEDICAL FULLY TAXABLE

CONVEYANCE FULLY TAXABLE.

HRA MINIMUM OF THE FOLLOWING.

1) ACTUAL HRA RECEIVED.

2)RENT (-) 10% OF BASIC.

3) 40% OR 50% OF BASIC( IN METRO 50%,OTHERWISE 40%)

LTA As per actuals of the fare expenses.

SPECIAL ALLOWANCE FULLY TAXABLE.

Children Education Allowance rs 100 monthly for each child upto 2 children.

DEDUCTIONS.

PROVIDENT FUND EMPLOYEE AND EMPOYER BOTH DEDUCT12% OF BASIC.

ESIC EMPLOYER CONTRIBUTION 3.25%, EMPLOYEE CONTRIBUTION 0.75%.

PROFESSIONAL TAX VARIES FROM STATE TO STATE.

LABOUR WELFARE FUND VARIES FROM STATE TO STATE.

Deductions

Deductions are part of the salary that are the part of the CTC but are deducted from the in-hand salarythat employees receive.Let”s take a deeper look at some of the most common salary deductions and what they mean.

  1. Provident Fund(PF)- is calculated 12% of basic +DA+special allowance .The employer and the employee both make an equal contribution of 12% eac h. This is applicable to companies who have 20 or more employees on their payroll.
  2. Employees state insurance corporation(ESIC)- Deductions towards ESIC are mandatory for employees whose gross salary is not more than 21000.It is only applicable on the companies where 20 or more employees within the 21000 gross salary bracket. Employee have to make a contribution of 0.75% and employer 3.75%.
  3. Professional tax – Professional tax is a tax levied by Government of certain state on salaried employees. The states where professional tax is applicable are Karnataka ,Bihar, West bengal , Andhra pradesh, Telengana,Maharastra,Tamil nadu, Gujarat, Assam, Chhattisgarh, Kerala, Meghalaya, Odisha, Tripura, Madhya pradesh , and Sikkim . The contribution amount varies from state to state where they are applicable.
  4. Labour welfare fund:_ Labour welfare fund , as the name suggest , is a contribution made by salaried employees for the benefit of labour class. This contribution is applicable in the state of Karnataka, West bengal, Maharastra , Andhra pradesh, Kerala, Goa, Delhi, Punjab, and Haryana, Madhya pradesh. The contribution amount varies from state to state and relatively small. The employer and the employee both make the contribution and employer pays approximately twice the employee contribution. Like professional tax labor welfare fund contribution also varies from state to state.
  5.  Once, you run the complete payroll process, manually or through any system, your senior authorities as per your company culture, may ask you for the reports such as department wise employee cost, location wise employee cost, etc. As a payroll officer, it becomes your responsibility to dig into the data and extract the required information and share the reports. These reports are automatically created by the professional payroll software whereas; some organizations invest a lot of time in creating those reports manually.

Thanks for Reading.

Rupa Banerjee – Payroll Editor

Categories
Provident Fund (PF)

how to generate PF ECR text file automatic from excel – vba code

Hey!

Below Excel VBA code with ready made process to generate and check monthly PF provident fund ECR (Electronic Challan Report) automatic from Excel in 1 click.

How to use generate ECR text file from Excel: – Steps

  1. Follow the ECR Format as downloaded from Unified portal (PF Website)
  2. Fill the all columns e.g. wage, contribution and days etc
  3. Copy below given code and paste it in your VBA Module 1 a Explain in video
  4. change the very first loop counts in you wish you change
  5. Press F5 or run this code to generate ECR text file.
  6. That’s All.
Sub ECR_Creator_code()
'this code made by Ajit Sir
'Follow on www.99Excel.com
'Follow on payrollpedia.org
Application.ScreenUpdating = True
Dim fso As Object, oFile As Object, FilePath, i, c, Livevalue, FolderPath, FileName, e As Long
FolderPath = "C:\Examples"
FileName = "PFECR_" & UCase(Format(Now(), "DD_MMMM_YYYY")) & ".txt"
Set fso = CreateObject("Scripting.FileSystemObject")
If Not fso.FolderExists(FolderPath) Then fso.CreateFolder FolderPath
Set oFile = fso.CreateTextFile(FolderPath & "\" & FileName)


For i = 2 To (Application.WorksheetFunction.CountA(Range("A2:A60000")) + 1)
    For c = 3 To 8
    Cells(i, c).Select
        If Cells(i, c).Value < 0 Then
        Cells(i, c).Interior.Color = 255
        e = e + 1
        Else
        Cells(i, c).Interior.Pattern = xlNone
        End If
    Next c
Next i


If e = 0 Then

For i = 2 To (Application.WorksheetFunction.CountA(Range("A2:A60000")) + 1)
    For c = 1 To 11
        If c = 1 Then
        Livevalue = Cells(i, c).Value & "#~#"
        Else
        Livevalue = Livevalue & Cells(i, c).Value & "#~#"
        End If
        
        If Cells(i, c).Value < 0 Then
        Range("E3").Interior.Color = 255
        Else: End If
    Next c
oFile.WriteLine Livevalue
Cells(i, 1).Select
Next i



oFile.Close
Set fso = Nothing
Set oFile = Nothing
Application.ScreenUpdating = False
MsgBox " ECR Saved in C:\Examples"
Else
MsgBox "error in ECR"
End If
End Sub

Categories
Payroll

Payroll Management System in India

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 the organizations policies. Apart from distributing pay checks to the employees , of salary is important a lot of time consumes in the areas of payroll management such as calculating tax deduction, statutory compliance.

Every time flipping through numerous files to respond to the employee 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 regulations 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  consequences.To make sure that your employees are happy and   you are law compliant, you need to have a proper understanding of what payroll is and how to run payroll effectively. we will start with the basic of payroll.

WHAT ARE STAGES TO PROCESSING PAYROLL?

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

Let us start our discussion with salary

A salary is a form of payment from an employer to employee, which may be specified as an employment contact. As per income tax act 1961, income of a person is computed under the five heads-

IN payroll income from salary and income from house property is considerable.

1. Income from salary

2. Income from house property

3. Income from business and profession.

4. Income from capital gains

5. Income from other sources.

INCOME FROM SALARY (TAXABLE INCOME UNDER SALARY)

1 Any salary due from an employer or a former employer to an assessee in the previous year whether paid or not.

2 Any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it comes due to him.

HRA ALLOWANCE

(U/S 10(13A))

HRA exemption is not mandatory ….  that means not Applicable to all.

 5% HRA is mandatory in state of Maharashtra. In metro 50% of basic salary and in mon-metro 40% of basic salary is applicable.

In HRA more than 50% is treated as special allowance.

HRA can be fully taxable, fully non-taxable, partly taxable, partly non-taxable.

HRA allowance can be non-taxable , in case employee is stayed on rent within India and submit rent paid slips to employer along with form 12BB.

HRA exemption should be paid in case-

Rent location should be in India.

Present proper rent slips with address, bills etc.

Only rent amount is considerable , no other charges.

Employee should part of residence.

Rent slip should  be required monthly or quarterly.

Rent amount should be paid by employee. Rent should not be paid more than three months.

Every employee has to submit landlord’s PAN along with name in case rent amount is more than 8333 rupees.

HRA exemption cannot be in negative figure.

PROVIDENT FUND

A provident fund is a government-managed, mandatory retirement savings scheme used in India, Singapore, and other developing nations.  A worker gives a portion of his/her salary to the provident fund, and an employer should make a contribution on behalf of the employees.

What are the benefits of PF to employees?

Tax-saving :

Under Section 80C of the Indian Income Tax Act, an employee’s contribution towards their PF account is deemed eligible for tax exemption. Moreover, earnings generated through EPF scheme are exempted from taxes. Such exemption can be availed up to a limit of Rs.150000

How PF is calculated on salary?

– If you are a man, you must contribute 10% or 12% of your basic salary. – In case you are a new woman employee, it is 8% of your basic salary for the first 3 years. Thereafter, it becomes 10% or 12% of your basic salary. – Your employer has to contribute an amount equal to 10% or 12% of your basic salary towards EPF.

WHAT IS THE ELIGIBILITY CRITERIA FOR AN EMPLOYEE?

Any salaried employee who is a resident of India is liable to be a member of the employee provident fund scheme. The employee is liable for this scheme right from the first day of his/her joining to any job. Once the employee becomes a member, he/she is accountable for provident funds benefits along with the insurance and pension benefits.

It is mandatory for employees having a salary of Rs. 15,000 or more to be a member of this scheme although the employee can voluntarily apply for it at any wage. The employee contributes a minimum 12% of salary (can voluntarily contribute more).

WHAT IS THE ELIGIBILITY CRITERIA FOR THE EMPLOYER?

An employer is exempt from EPF scheme registration if the total employment of the organisation is less than 20 employees. An employer can also get an exemption if maximum employees voice their consent over the exemption although the latter case involves certain conditions and requires a lot of formalities. But in case, the total employees are more than 20 then it becomes mandatory for the employer to register for the EFF scheme.

 What is the current PF contribution rate?

Based on Basic salary: Generally, 12 per cent of Basic Salary goes into the PF account each month. So, if your monthly Basic Salary is Rs nearly 1.75 lakh ( just the basic salary and not your total monthly income), your monthly contribution is nearly Rs 20833, which is Rs 2.5 lakh in a year.

How is PF calculated?

The employee contributes 12 percent of his or her basic salary along with the Dearness Allowance every month to the EPF account. For example: If the basic salary is Rs. 15,000 per month, the employee contribution shall be 12 % of 15000, which comes to Rs 1800/-. This amount is the employee contribution.

ESIC –( EMPLOYEE STATE INSURANCE CORPORATION ACT 1948)

ESIC ACT was enacted by the government of india in 1948.The major objectives of this act was to provide certain benefits to employees in case of sickness, maternity and injury (during employment) and for providing other benefits in relation to main objects.

Those people whose gross monthly salary less than 21000 are eligible for ESIC.

In case person is disabled ESIC limit will be 25000.(Disability should be more than 40%.

ESIC provides full medical care to employees (spouse and dependents) in case of sickness,maternity,funeral expense, etc.

ESIC registration for new joiners within 10 days from the date of joining.

ESIC BENEFITS:

MATERNITY BENEFIT- either in block 70 days working she is eligible for maternity benefits.

ILLNESS BENEFITS- sickness benefit after completing 78 days. payable 70% of daily wages.

DEATH BENEFITS: start from date of joining 100% payable.

Vocational Benefits: During employment in case if there is any injury employee can claim 123 rupees per day.

ESIC always deducted in gross salary.

                          ESIC RATE

0.75% EMPLOYEE

3.25% EMPLOYER

PAYMENT MODE ONLINE,LAST DATE OF ESIC

CHALLAN DEPOSIT IS 15 OF FOLLOWING MONTH.

D A (DEARNESS ALLOWANCE)

What is Dearness Allowance

Dearness Allowance is paid by the government to its employees as well as a pensioner to offset the impact of inflation. The effective salary of government employees requires constant enhancement to help them cope up with the increasing prices. Despite several measures by the government to control the rate of inflation, only partial success has been achieved because the prices move according to the market. It, therefore, becomes essential for the government to shield its employees from the adverse effects of inflation. As the impact of inflation varies according to the location of the employee, dearness allowance is calculated accordingly. Thus, DA varies from employee to employee based on their presence in the urban, semi-urban or rural sector.

Calculation of Dearness Allowance

As DA is provided to employees to protect against the price rise in a particular financial year, it is calculated twice every year – in January and July. The formula to calculate the dearness allowance was changed in 2006 by the Government. Presently, DA is calculated as per the following formula: For the employees of Central Government % of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 12 months -115.76)/115.76} x 100For Central Public Sector Employees % of DA = {(Average of the All-India Consumer Price Index (Base year -2001 =100) for the last 3 months -126.33)/126.33} x 100

Treatment of Dearness Allowance under Income Tax

As per the latest updates, DA is fully taxable for salaried employees. If the employee has been provided with an unfurnished rent-free accommodation, it becomes that part of the salary up to which it forms the retirement benefit salary of the employee, provided that all other pre-conditions are met. The Income Tax rules in India require the dearness allowance component to be mentioned separately in the returns that have been filed.

MATERNITY BENEFIT ACT

Maternity leaves applicable on a woman worker after 86 days. She should work at least 86 days for 6 months of maternity leaves.

Full wage salary is paid during this period.

Overtime is not allowed.Termination is not allowed.During maternity leave no other leave will be counted.

Work from home is allowed during maternity leave.

During maternity leave transfer is not allowed.

INCOME TAX

Income tax is a type of tax that central government charges on the income earned during a financial year by the individuals and businesses. Taxes are sources of revenue for the government. Government utilizes this revenue for developing infrastructure, providing healthcare, education, subsidy to the farmer/ agriculture sector and in other government welfare schemes. Taxes are mainly of two types, direct taxes and indirect form of taxes.  Tax levied directly on the income earned is called as direct tax,   for example Income tax is a direct tax. The tax calculation is based on the income slab rates applicable during that financial year.

What is the Existing / Old tax regime?

The old tax regime provides 3 slab rates for levy of income tax which are 5%, 20% tax rate and 30% for different brackets of income. The individuals have been given the option to continue with this Old tax regime and they can claim deductions of allowances like Leave Travel Concession (LTC), House Rent Allowance (HRA), and certain other allowances. Additionally, deductions for tax saving investments as per section 80C (LIC, PPF ,NPS etc) to 80U can be claimed. Standard deduction of Rs 50,000, deduction for interest paid on home loan.
Tax slab rates applicable for Individual taxpayer below 60 years for Old tax regime is as below:

Income RangeTax rateTax to be paid
Up to Rs.2,50,0000No tax
Between Rs 2.5 lakhs and Rs 5 lakhs5%5% of your taxable income
Between Rs 5 lakhs and Rs 10 lakhs20%Rs 12,500+ 20% of income above Rs 5 lakhs
Above 10 lakhs30%Rs 1,12,500+ 30% of income above Rs 10 lakhs

There are two other tax slabs for two other age groups: those who are 60 and older and those who are above 80.A word of note: People often misunderstand that if they earn let’s say Rs.12 lakhs, they will be paying a 30% tax on Rs.12 lakhs i.e Rs.3,60,000. That’s incorrect. A person earning 12 lakhs in the progressive tax system, will pay Rs.1,12,500+ Rs.60,000 = Rs. 1,72,500. Check out the income tax slabs for previous years and other age brackets.

Income Tax Slabs under new tax regime

From the FY 2020-21, a new tax regime is available for individuals and HUFs with lower tax rates and zero deductions/exemptions. Individuals and HUF have the option to choose the new regime or continue with the old regime.The new tax regime is optional and the choice should be made at the time of filing the ITR. If the old regime is continued than all the deductions/exemptions as available can be availed by the taxpayer. The income tax slabs under the new tax regime are:

New regime slab ratesExisting regime slab rates
Income from Rs 2.5 lakh to Rs 5 lakh5%Income from Rs 2.5 lakh to Rs 5 lakh5%
Income from Rs 5 lakh to Rs 7.5 lakh10%Income from Rs 5 lakh to Rs 10 lakh20%
Income from Rs 7.5 lakh to Rs 10 lakh15%Income above Rs 10 lakh30%
Income from Rs 10 lakh to Rs 12.5 lakh20%
Income from Rs 12.5 lakh to Rs 15 lakh25%
Income above Rs 15 lakh30%

Most of the deductions like deductions and exemptions are not allowed if the taxpayers opts for the New Tax regime. However he exemptions and deductions available under the new regime are:

  • Transport allowances in case of a specially-abled person.
  • Conveyance allowance received to meet the conveyance expenditure incurred as part of the employment.
  • Any compensation received to meet the cost of travel on tour or transfer.
  • Daily allowance received to meet the ordinary regular charges or expenditure you incur on account of absence from his regular place of duty.

GRATUITY

EXEMPTION U/S10(10(iii))

Gratuity is a retirement benefit payable at the time of retirement. Or leaving company at the age of 45 years. Or at death.

Eligibility- If a person complited 5 years in accompany.

Gratuity amount should be paid within 30 days of leaving.

Upto 2000000 lacs of gratuity amount is taxfree.

Calculation- last basic salary+ DA/26*15* no,of years of service.

LTA U/S10(5)

This allowance is meant for travelling expenses. Destination should be within India. This facility given 2 times within 4 years block.

Employee should have one of the traveller.

Foreign travel is not allowed.

LTA is non taxable upto 3 lacs in whole life.

Travelling mode –

By air-economy class.

By rail-AC first  class.

By taxi AC first class train rate.

SPECIAL ALLOWANCE

Special allowance is a fixed amount that is given to employees over and above the basic salary in order to meet certain requirements. There is a taxable allowance and an exempt allowance. There are different categories of special allowances.

CONCLUSION (THE ROLL OF PAYROLL MANAGEMENT)

 Broadly speaking, the payroll department pays employees accurately and on time. A wide range of duties encompass this process. Depending on the size of the business, the payroll department may have one or two employees or several employees. The primary mission of the payroll department is to ensure that all employee is being paid accurately and timely  with currect withholding and deduction ,and that withholding and deduction are remitted in a timely manner. The payroll department takes care of wage deduction, record keeping, and verifying reliability of pay data.

Thank You
Rupa Banerjee – Payroll Executive – Mumbai
Write to me at: rupabanerjee70@gmail.com

Categories
Form 16

how to sign form 16 digitally from excel – digital signature in TDS form 16

Hello,

Please read the following guide to understand how to signed digitally multipal TDS Form 16 pdf files using the Excel VBA code made by Ajit Sir.

How to digitally signed form 16 from Excel using VBA Code:-

  1. Open Excel file and Click on Developer tab to go on VBA project screen
  2. Click on Insert option and insert a new module
  3. Copy below VBA code (Add Digital Signature to PDF) and paste in module
  4. Add Pfx File path to call/select digital signature certificate for signing
  5. Add Password of certificate
  6. Add PDF full path and name with .pdf in Inputfile to signed
  7. Add PDF full path and name with .pdf in outfile to Save output
  8. Press F5 OR run macro 2 times to signed
  9. That’s All.
Sub DigitalSignedPDFCode()
Dim SignedPDF, FileCount, PFX_pass, strSignFName, inputpdf, epass, outputpdf
Dim pdfPDDoc As New AcroPDDoc, oJS As Object, oSign As Object, oPpklite As Object
Dim oSignInfo As Object
Dim ResultLogin As Boolean
Dim ResultSign As Boolean
Dim arr() As String
Set pdfPDDoc = CreateObject("AcroExch.PDDoc")
Set oJS = pdfPDDoc.GetJSObject
Set oPpklite = oJS.security.getHandler("Adobe.PPKLite", True)
             
strSignFName = "PFX CERTIICATE PATH"
PFX_pass = "PFX PASSWORD"
inputpdf = "PDF FILE FOR SIGN"
outputpdf = "PDF FILE AFTER SIGNED"             
               
'Page 1
Set oFields = oJS.AddField("SignatureField", "signature", 0, Array(80, 220, 255, 250))
Set oSign = oJS.GetField("SignatureField")
ResultLogin = oPpklite.login(PFX_pass, strSignFName)
oPpklite.setPasswordTimeout PFX_pass, 60
arr = Split("", ",")
ResultSign = oSign.signatureSign(oPpklite, arr, outputpdf)

oPpklite.logout
pdfPDDoc.Close
Set oJS = Nothing
Set oSign = Nothing
Set oPpklite = Nothing
Set pdfPDDoc = Nothing

End Sub

We have all HR and Payroll Calculation and solutions in Excel and we believe and Excel automation, this is one of them. for more details visit www.99Excel.Com or write to us AT : support@99excel.com

Thanks, Team Payroll Automation

Categories
Form 16

How to merge, protect, signed and Email TDS form 16 to employee from Excel sheet

As you know form 16 generating have some manual process but using VBA excel automation you can do it automatic and without error. Following steps you can automate:-

  1. How to merge part A and Part B of form 16 using Excel
  2. How to set password in form 16 pdf file using Excel
  3. How to signed digital signature in from 16 using Excel
  4. Final send TDS form 16 to you employee from excel using outlook.

Watch below video for tutorial and you can purchase this excel utility from www.99Excel.Com OR Call on +91 9654421288.

Categories
Salary and CTC Breakup

CTC Salary Calculator in Excel with Complete Payroll Setup

Click here to download automatic Complete Payroll Calculator in Excel. This Excel Software includes most likely all part of Payroll Calculation. It’s Includes following Features:-

  • You can calculate Cost to company CTC Automatic once you put total ctc.
  • You can restructure allowances and CTC components as per your need.
  • Income Tax  to be calculate automatic.
  • You can set your investment Declaration or Proofs Planing as per requirement.
  • This sheet will calculate House rent allowance ( HRA Rent Exemption calculation) under section 10(13A) automatic as per your rent paid and selected city.
  • You can customize your structure like add / less : PF (Employees’ Provident Fund), Employment State Insurance ( ESIC), Gratuity, Mediclaim, any other benefit, Bonus, Minwages.
  • You can control to deduct PF on Basic OR PF on Allowances or PF on min wages of PF or you can select No if you are not eligible for pf deduction.
  • You can Se-off loss / income from house property u/s 24(b) as per Income Tax Act.
  • You can add reimbursement components as per bills planing to get more benefit in tax.
  • This sheet will give you Net payment Automatically as per your Inputs.
  • Best part of this software is that, you can generate  your salary pay slip from CTC in one click and change payslip in excel as per needs.
  • We have added logo on slip so that you can change it.
  • You can generate any month salary slip from excel format in one click even you can generate full and final slip.
  • This sheet is Free to download

  • Paid Support Available at :
  • Email: ajityadav121@gmail.com

Click here to Download Automated Excel Sheet to calculate cost to company (CTC), Income Tax Calculation along with all investment planning (Deduction U/C VI-A)  and all Major Exemptions allowed + reimbursement  in Salary.

This sheet will allowed to planning your tax saving, make salary structure as per your choice and know the Net in hand Automatically.

Thanks! Ajit

Categories
Increment Letters in PDF Payroll

Prepare Salary Increment PDF Letters using Mail Merge from Excel

Hi folks,

I will explain below one of the most common practice used in HR – human resource department e.g. Increment Letters Preparation, please follow the all steps. I will refer here following steps and topics:

  1. A Excel sheet with 5000 employee’s
  2. A word file which Increment letter template
  3. Mail merge Process
  4. MS word VBA code to generate PDF files from word
  5. MS word VBA code to hide zero value from increment letter for any allowance
  6. MS word VBA code to change authorize signatory’s scan signature as per manager name.
  7. Excel VBA Code to set individual password in employee’s separates increment letter ( Make sure this will work only if you are using office 32 bit only). Use info excel formula to get to know office version e.g.: =INFO(“OSVERSION”)

VBA Code for PDF generating from MS word file using mail merge

Sub Pdf_files_from_word()
'This code create by Ajit Yadav @99Excel.com
Dim fs, DocName, PDFPath, Folderpath, From, Till, Message
Folderpath = ActiveDocument.Path & "\" & "PDF Letters"
Set fs = CreateObject("Scripting.FileSystemObject")
If fs.FolderExists(Folderpath) = False Then
fs.createfolder (Folderpath)
Else
End If
        
From = 1    'Change From value
Till = 10    'Change Till value
 
Message = (Till - From) + 1
While From <= Till

    ActiveDocument.MailMerge.DataSource.ActiveRecord = From
    DocName = ActiveDocument.Fields(4).Result
    PDFPath = Folderpath & "\" & DocName & ".pdf"
    Call HideBlankCells
    Call Signature_Ins
    ActiveDocument.ExportAsFixedFormat OutputFileName:=PDFPath, ExportFormat:=wdExportFormatPDF, OpenAfterExport:=False, OptimizeFor:=wdExportOptimizeForPrint, Range:=wdExportAllDocument, Item:=wdExportDocumentContent, IncludeDocProps:=True
    Call UnHideBlankCells
From = From + 1
Wend
MsgBox "Done"
End Sub



Sub HideBlankCells()
Dim TableNo, ColumnNo, RowNo, I, GetValues
TableNo = 1
ColumnNo = 2
RowNo = ActiveDocument.Tables(TableNo).Rows.Count

For I = 2 To (RowNo - 2)
GetValues = CleanString(Trim(ActiveDocument.Tables(TableNo).Cell(I, ColumnNo).Range.Text))
ActiveDocument.Tables(TableNo).Cell(I, ColumnNo).Range.Select
If GetValues = 0 Or GetValues = "" Or GetValues = "0" Or GetValues = " " Or GetValues = "" Then
ActiveDocument.Tables(TableNo).Rows(I).Select
Selection.Rows.HeightRule = wdRowHeightExactly
Selection.Borders(wdBorderBottom).LineStyle = wdLineStyleNone
Selection.Rows.Height = CentimetersToPoints(0.001)
Else: End If
Next I

End Sub

Sub UnHideBlankCells()
Dim TableNo, ColumnNo, RowHigh, RowNo
TableNo = 1
ColumnNo = 1
RowHeightV = 0.8
RowNo = ActiveDocument.Tables(TableNo).Rows.Count

ActiveDocument.Tables(TableNo).Select
Selection.Cells.VerticalAlignment = wdCellAlignVerticalCenter
Selection.Rows.HeightRule = wdRowHeightExactly
Selection.Rows.Height = CentimetersToPoints(RowHeightV)

    For I = 2 To (RowNo - 1)
    ActiveDocument.Tables(TableNo).Rows(I).Select
    Selection.Rows.Borders(wdBorderBottom).LineStyle = wdLineStyleSingle
    Next I

End Sub


Function Signature_Ins()
If ActiveDocument.Fields(17).Result = "Ankita Joshi" Then
ActiveDocument.Shapes("Rectangle 1").Select
Selection.ShapeRange.Fill.UserPicture (ActiveDocument.Path & "\" & "Sign" & "\" & "Signature_Ankita Joshi.jpg")
ElseIf ActiveDocument.Fields(17).Result = "Vikas Maurya" Then
ActiveDocument.Shapes("Rectangle 1").Select
Selection.ShapeRange.Fill.UserPicture (ActiveDocument.Path & "\" & "Sign" & "\" & "Signature_Vikas Maurya.jpg")
Else
ActiveDocument.Shapes("Rectangle 1").Select
Selection.ShapeRange.Fill.UserPicture (ActiveDocument.Path & "\" & "Sign" & "\" & "Blank.jpg")
End If
End Function
Buy Pro Excel Sheet
WhatsApp: +91 9654421288
Categories
Payroll

Time to declare Tax regime and Investment Tax Planning for FY 2021-22

Dear All HR and Payroll Team,

It is time to get collect Tax regime old regime status and New Regime under section 115bac for tax computation for new financial Year 2021- 22.

Because we are in April and this is very first month for this financial Year so we need to send form 12BA investment declaration form to all employees to collect their this year tax planning details before calculating tax for April 2021.

Download ready to use Excel Both tax regime tax calculation and compare Sheet.

Download Excel to compare

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