The Payroll Setup Checklist: Everything You Need to Know to Get Started
What is a Payroll?
It’s a list of the employees working for your company and the money you pay to them as salary. Payroll Outsourcing Services actually makes it easier for you to manage the payroll, deal with statutory compliance, and manage taxation.
Here’s the essential payroll setup checklist to facilitate a smooth transition:
Get the company papers ready: You need to obtain RoC, Electronic Challan cum Return (ECR), Tax Payer Identification Number (TIN), GST etc. as those will be required prior to setting up the payroll management system.
Classify employees: Small businesses in India have a variety of employee payroll system, so it’s imperative that you properly distinguish between employees, contractors, and freelancers. Actually, this has a direct impact on ECR, ESI, and taxation.
Choose a payment schedule: It’s important to determine when to pay your employees. Some of the options available to you include weekly, Bi-weekly, Semi-monthly, and monthly payroll schedules. Later in this article, we will try to understand why choosing a payroll schedule isn’t easy.
Organize the compensation terms: Here again, it’s essential that you keep a tab on employee hours, paid time off, overtime and various other requirements of your business so that it’s easier for you to comply with the Industrial Labour Laws. In addition, one must also properly calculate deductibles such as retirement contributions, health plans etc, if you’re offering all those options to your employees.
Start the Payroll Management System: Running the HR payroll process implies that you have successfully filed all the information into the system. Now, you need to also determine whether you offer checks, direct bank account transfer ie. online payroll management or cash to your employees and accordingly feed the information into the system.
Why Choosing a Payroll Schedule Isn’t So Simple?
Choosing a payroll schedule isn’t important because it depends on a number of complex factors such as the nature of your business, taxation rules, and statutory compliances. For instance, it’s not possible for an IT company to opt for weekly payroll schedule as a majority of the projects are long-running and involves high-skilled (read technical) workforce. On the other hand, it’s easier for a construction company that is involved in a labour-intensive job to pay its workers weekly. The usual norm in India is to go for the monthly payment schedule as the processing costs and statutory compliances can be managed easily.
Is Payroll outsourcing an intelligent option?
If you feel overwhelmed by the different aspects of payroll management and think that you would fare poorly in getting everything done properly then it’s best to outsource the task to any of the Payroll Services in India. However, before you go ahead with outsourcing the payroll management to another company, it’s better to research a little.
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