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PAYROLL

This document discusses the key steps in payroll processing and reporting. It covers gathering payroll inputs and setting up employee information, updating payroll changes, validating data and calculating taxes and deductions like PF, ESI, professional tax, and LWF. It also discusses generating salary slips and registers, management information reports, and statutory forms like Form 16, Form 24, and TDS returns. The document provides details on the various payroll reports and calculations required for processing payroll and complying with regulations.

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46 views17 pages

PAYROLL

This document discusses the key steps in payroll processing and reporting. It covers gathering payroll inputs and setting up employee information, updating payroll changes, validating data and calculating taxes and deductions like PF, ESI, professional tax, and LWF. It also discusses generating salary slips and registers, management information reports, and statutory forms like Form 16, Form 24, and TDS returns. The document provides details on the various payroll reports and calculations required for processing payroll and complying with regulations.

Uploaded by

saptaksamadder4
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Payroll Processing and Reports

Payroll Processing and Reports


1) Gather Payroll Inputs, Setup Employees Information in Payroll
System
The features of payroll management software include quarterly audit reports,
leave status and direct labour distribution documents. There are also
regular payroll reports, wage file reports, and track reconciliation reports.
Employee Profile setup
Employee Profile is the database for all payroll modules. It offers you basic
management options and self-service functions regarding your HR master data in
the cloud.

Update Payroll Changes


Select Employees, then select Get Payroll Updates. Select the Download
Entire Update checkbox. Select Download Latest Update. An informational
window appears when the download is complete.
Validation of Row data and Check Reference of Calculation flags
Validating data is the process of confirming that the values being entered
into data objects conform to the constraints within a dataset's schema.
The validation process also confirms that these values are following the rules that
have been established for your application.

The three phases of the validation process check that:


• A required (mandatory) field has an entry
• The field has the correct data type
• Any "custom" validation check specified in the VIFRED form definition is
performed
Calculation of PF
PF is calculated at the rate of 12% of your Basic Salary. The employer has to
contribute an amount equal to 10% or 12% of your basic salary towards EPF.

Calculation of ESI
The rates of the ESI contribution are calculated on the wages paid. Currently, the
employee contribution is 0.75% of wages paid/payable, and employer contribution
is 3.25% of wages paid/payable.
Calculation of Professional Tax

Income per Month Tax Rate/Tax Amount (per


month)

Up to Rs. 7,500 Nil (for male)

Up to Rs. 10,000 Nil (for female)

From Rs. 7,500 to Rs. 10,000 Rs. 175 (for male)

Rs. 200 for 11 months + Rs.


Rs. 10,000 onwards
300 for 12th month
Calculation of LWF
The contribution to LWF fund by the employee is Rs. 6 for salary upto Rs. 3000
and Rs. 12 for salary above Rs. 3000. Employer contribution is double than that of
the employee. LWF is not applicable to those working in the managerial or
supervisory position and drawing wages more than Rs. 3,500/- per month. LWF is
to be deposited in the month of June and December only.

Calculation of Tax
Income tax is calculated on the basis of tax slab. Your taxable income is worked
out after making relevant deductions, other taxes that you may have already paid
(Advance Tax) and tax deducted at source (TDS), the resultant taxable income will
be taxed at the slab rate that is applicable.
Tax Computation
A tax computation is a statement showing the tax adjustments to the accounting
profit to arrive at the income that is chargeable to tax. Tax adjustments include
non-deductible expenses, non-taxable receipts, further deductions and capital
allowances.
Deductions under other sections like 80E, 80G, 80TTA
• 80E: Interest to be paid on education loan.
• 80G: Donations to be made to specified organizations.
• 80TTA: Interest income earned from savings bank account80D: Premium to be
paid for medical insurance.
3) Verification and Payroll Checking Step by Step

An important aspect of any payroll-related transformation at the global level is a


comprehensive planning exercise that defines the global processes for payroll in
each country that would best support a successful transition.
Global transformations carry inherent change management risks, demanding a
phased approach.
There are three types of Transformation Payroll
• Streamlining and standardizing payroll operations globally
• Reducing risks
• Delivering a quality experience for employees
Attribution of head count and cost payout

A payout may be expressed on an overall or periodic basis and as either a


percentage of the investment's cost or in a real monetary amount. A payout can
also refer to the period in which an investment or a project is expected to recoup its
initial capital investment and become minimally profitable.
4) Salary Register, Slips, Bank Transfer and Management Information
System – MIS

Overview on salary Slip and Salary Register


A salary slip is a document issued by an employer to an employee. It contains a
detailed description of the employee's salary components like HRA, LTA, Bonus
paid etc. and deductions for a specified time period, usually a month. It may be
issued on paper or mailed to the employee.
Salary Register format is like a typical register report incorporating all the details
about the salary earned by the employees. The Salary Register contains the
columns like Employee Name, Department, Work days, Break up of Earnings and
Break up of Deductions and the Net Pay payable to employees.
Management Information Reports – MIS
MIS reports are the reports generated from MIS. MIS stands for the management
information system, which is an information system used by most organizations to
coordinate, control, and visualize data for better decision making.
Variance of Payroll and Cost Center Reports
Payroll variance is calculated when the actual amount paid to a salaried employee
is greater than or less than the standard cost calculated at the time of entry.
Cost Centre Reports are primarily performance reports that give a different
perspective to transactions. Ensure the option Maintain cost centers is set to Yes
in F11: Features . On this page. Cost Centre Vouchers.
Cost to Company Reports
Cost To Company (CTC): The Cost to Company or CTC is the amount that an
employer expends in hiring the service of an employee. Gross Salary: Subtract
gratuity and the employee provident fund (EPF) from Cost to Company (CTC), the
amount that you get is your Gross Salary.
5) Prepare Statutory Reports PF, ESI, PT, ESI and TDS Form 24, Form 16
etc.
If your UAN is registered with the EPFO, you can get the details of your
latest contribution and PF balance by sending an SMS to 7738299899. You need
to send this message: EPFOHO UAN ENG. 'ENG' is the first three characters of
the preferred language.

Deduction Reports of Professional tax and Labour welfare fund


Professional tax is calculated every month based on your gross salary for that
month. Say your CTC is Rs. 50,000 per month, and after deduction of your EPF,
gratuity, and leave deduction or payment towards any loan you may have taken
from the company in the past, your gross salary comes to Rs. 40,000.
Form 16 & 12ba
• Navigate to Payroll > Admin > Form 16. The Form 16 page appears.
• Click the Settings button in the Current Settings panel of the page. You are
taken to the Form 16 Options page. ...
• Under the Form 16 Generation section, enable the check box adjacent to
Show with Form 12 BA.
• Click Save.

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