PAYROLL

Payroll Management terms

What is Payroll and how it has been processed?

Payroll is the salary processing system. Payroll is divided into two parts. Monthly and Annual Payroll. Monthly payroll which includes the following * Basic salary * HRA - 50 % of basic for four major metros( Chennai, Delhi, Mumbai & Kolkotta) & 40% for other metros * Conveyance - Rs 800/p.m. if excess would be added to taxable salary * Special allowance Annual payroll * Medical Reimbursement - Rs 15,000/- max p.a. * LTA * Meal Vouchers - Rs 50 per working day paid through Sodexho /Accor vouchers.. Payroll can be seen from two aspects. One is from HR side and other from commercial people side. The HR persons process the payroll by means of sending attendance details or better say LWP details and other complete details that an employee is going to get in a particular month. And after receiving those details the commercial people start making entry into payroll software and can be said start salary processing.

INITIAL BASIC STEPS TO CREATE PAYROLL

An employee data base (i.e.) a Master List to created which contains all the details of the employees like, Date of Joining, Education, Work Experience, Personal details (DOB, Contact info), Salary break up details

Attendance/ Leave record to be maintained

OTHER RELATED INFO ON FOR CALCULATIONS

The salary break up details of all the existing employees

Attendance of all employees:: LOP details (you may have to deduct this from their salary)
Salary Revision (w.e.f that particular month) 4. New Additions/Recruits (To be calculated form the date of Joining) 5. Full and final Settlements (If any are to be calculated separately not with payroll) 6. Additions
Arrears if anything to be paid Reimbursements Other Additions

(Contd..)

OTHER RELATED INFO ON FOR CALCULATIONS

Deductions Provident Fund Professional Tax Income Tax Loans or advances Other recoveries Misc Change

Employee Bank account details if any change.

SALARY PROCESSING

While processing salary for a particular month, the HR personals provide complete LWP (Leave without Pay) details to the commercial dept. While calculating LWP, the attendance sheet will be prepared with the weekly offs. And apart from weekly offs, how many days an employee is absent will be checked, out of which how many days he was on leave that will be crosschecked with leave applications. If the particular employee has given the approved leave application form and that leave is been there in his account then he is considered as leave. Salary will not be deducted for that day. But if the person has not submitted the leave application form or he doesn't have any leave in his balance then for that particular day that employee will be assumed absent, and will be deducted from his salary for that day.

Similarly if there is any provision to provide one day extra salary for a specific day if the employee does come, then one day extra salary will be calculated for those employees who were present on that day.

Major activities of core Generalist HR

Recruitment Management Workforce Planning Induction Management Training Management Performance Management Compensation & Benefits Attendance Management Leave Management Benefits Management Overtime Management Pay slip Distribution Time sheet Management Employee Information/ Skill Management Grievance Redressal Employee Survey Exit Interviews & Process Health & Safety

Payroll Generation

Payroll generation depends totally on number of days in month. Say Feb (28 days). Total salary package will be paid accordingly, but while deducting a LWP it would be calculated on basis of 28 days. Thus its irrespective of any number of holidays etc. The Industrial Employment (Standing Orders) Act, 1946 (Ref. model Standing Order) the salary should be calculated on 30days for Monthly rated employee and 26days for daily rated employee, to maintain the constant PF deductions & LOP of an employee As per government norms 26 days are calculated for salary in every month, there is no partiality to the workers like skilled or semi skilled or clerical job the role applicable to all, but some of the private concerns follow 30 or 31 days for their own benefit. 26 days are consider salary calculation period. It is 30 days irrespective of the Sundays and holidays for monthly wages and 26 days for daily wages.