Payroll

Service Description

Payroll processing is the process of calculating and disbursing employee salaries and benefits in a timely and accurate manner. It involves a range of activities such as recording employee attendance, calculating deductions, maintaining tax compliance, and making payments to employees. In India, payroll processing is governed by a number of laws and regulations. Some of the key components of payroll processing in India include: Provident Fund (PF): Provident Fund is a social security scheme that provides retirement benefits to employees. It is mandatory for companies with 20 or more employees to register for the Employee Provident Fund (EPF) and deposit a percentage of employees’ basic pay (currently 12%) into their EPF account. The employer is also required to make a matching contribution. Employee State Insurance (ESI): ESI is a health insurance scheme for employees that provides cash and medical benefits in case of sickness, maternity, disability, or death due to employment-related injuries. It is mandatory for companies with 10 or more employees to register for ESI and contribute a percentage of employees’ gross salary (currently 4.0%) towards ESI. Labour Welfare Fund (LWF): LWF is a fund that is set up by state governments to provide social security benefits to workers. It is typically funded by contributions from employers and employees. The contribution rate varies from state to state. Professional Tax (PT): Professional Tax is a tax that is levied by state governments on salaried employees and professionals. It is typically a small amount that is deducted from the employee’s salary and paid to the state government. In addition to the above components, payroll processing in India also involves calculating and deducting income tax as per the Income Tax Act, 1961, as well as other deductions such as employee provident fund loan repayment, voluntary provident fund contributions, and employee state insurance loan repayment. Employers are also required to file various statutory returns and maintain accurate records of all payroll-related transactions.