Category Archives: ESI

Online Payroll Software & Statutory Compliances in India (ESI, PF, PT, TDS)

By | ESI, Payroll, Provident Fund | 2 Comments

Payroll is one of the key functions of an organization. Payroll processing involves many complex tasks such as entering the details of the new inductees, updating leave records, submission and approval of timesheets for accurate computation, and dispensing off the salaries after making statutory (PF, ESI, PT, TDS)and non-statutory deductions.

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Income Tax

The statutory compliances relating to payroll in India include health benefits covered under ESI, bonus, maternity benefits for women employees and superannuation benefits – Provident Fund, Gratuity and Tax Deduction at Source (TDS). TDS is deducted on the ‘cost to company’ (CTC) if the salary comes under the income tax slab. It is the total cost incurred by the employer inclusive of all the allowances, benefits and perquisites. Professional tax (PT) is another statutory deduction made from the gross salary of the employees. Women employees are also entitled for maternity benefits. The employees who put in extra hours at work are entitled to get overtime payment which is again a statutory requirement and is applicable primarily in manufacturing companies.

Initially, computation of these statutory compliances was done manually, involving lot of paperwork. Doing these complex calculations took up a lot of time and efforts of the concerned department employees. It also increased the probability of committing errors in salary and leave calculations.

These difficulties were somewhat minimised with the advent of computers. The Microsoft Excel spreadsheets eased the problems of the employees of the respective human resource and finance departments to some extent. They could enable faster calculations with the help of formulas in the spreadsheets. However, it did not free them of the hassles they faced in the computation of statutory compliances for all the employees of an organization. For example, let us consider that 15 employees in the production department of a manufacturing company are drawing CTC in the slab of 3 LPA to 6 LPA. The calculation of statutory deductions will not be the same for all the employees as they are drawing different CTC. Further, when an employee gets a raise or an increment in salary, the human resource division employees have to do the statutory deductions all over again as per the new compensation package. This is a tedious and time-taking exercise with the possibility of committing errors being high.

The employee grievances over the deductions made in their salary also increase due to lack of transparency. The respective employees flock to the human resource department with their escalations, which consumes a lot of time of the employees.

This is when the companies realise the importance of migrating to online payroll system to put an end to these complex issues faced during payroll processing. Moreover, it would minimise the chances of committing errors, leading to 100 percent accurate computation of salary. With all the salary details of the respective employees at one place inclusive of the statutory deductions, it will lend transparency to the whole system. This would, in turn, increase the efficiency and productivity of the employees. The human resource and finance department employees of an organization who were otherwise involved in working out long calculations can utilise their time in productive assignments. This enhances the overall profitability of the enterprise as the efficiency of the employees goes up.

With the cloud-based online payroll system, the computation of statutory compliances has become very easy and simple for the respective employees involved in the same. Further, the employees can also generate PF, ESI and bonus reports with full accuracy.

Online Payroll Software – Tax Deducted at Source (TDS) for salaries

  • Keep track of monthly TDS Challans paid
  • Generate FVU file for quarterly filing of TDS returns 24Q
  • Generate Digitally signed Form 16 with Part A and Part B

Online Payroll Software – Provident Fund (PF)

  • Generate KYC File
  • Generate monthly ECR File Electronic Return cum Challan File

Online Payroll Software – Employee State Insurance (ESI) for salaries

  • Generate Monthly Contribution File
  • Generate New Insured Person’s IP File

Online Payroll Software – Professional Tax (PT) for salaries

  • Generate Professional Tax Reports for respective states
  • Generate Professional Tax deduction reports for online filing

Organizations operating in different sectors, be it manufacturing, information technology, real estate, banking and finance, to name a few are governed by various legal provisions for safeguarding the interests of both, the company and its workforce. It prevents the ill-treatment of workers at the hands of their employers working at different tiers in the organization. All the organizations, whether small and medium enterprises or large corporate houses are mandated to strictly adhere by the provisions laid down in these labour legislations for the smooth running of their businesses. The company can get into serious trouble if found violating the provisions mentioned under the labour laws.

Statutory compliances play an important role in the payroll processing therefore they need to be implemented with great care and precision. Online payroll systems such as Brio’s Online Payroll application, have simplified the complex calculations involved in processing of payroll. Moving to an online payroll has helped the organizations to work within the provisions of the legal framework in a time and cost-effective manner with highest degree of accuracy. It’s time you switched over too if you are still maintaining your payroll on spreadsheets.

Employees Attendance System, its role & importance

By | Employee Attendance, ESI, Leave Management, Payroll | No Comments
Employee Attendance System

In any business organizations, tracking of employee time and attendance is one of the most critical factors that affect the overall profitability of the business operations as also the prospects for future growth. It becomes cumbersome for businesses to manually track when individual employees enter and leave office, when are they taking vacation or sick days, and which organizational projects they’re spending their time on.

Under such circumstances, time attendance software can not only record the employee logging time on a daily basis but also add an extra layer of security, accountability and efficiency. A time and attendance system software allows for more efficient payroll and attendance processing. This is a major factor influencing organizations to opt for attendance systems to handle these tasks automatically.

As the name suggests, time attendance software can accurately track hours logged and paid time off. This means that the company can easily put a check on time theft committed by unscrupulous and opportunistic employees in the long run. In addition, it can also make sure certain mandatory conditions or rules are being met.

Some businesses may argue that attendance management software requires costly investment that makes these systems seem out of budget. But with the advancement in the field of information technology, the cost of time attendance systems has become affordable even for the smallest businesses. The installation and deployment of such systems has become simpler as well as the savings in money and time are tremendous.

According to the American Payroll Association (APA), companies that lack automated timekeeping end up having an eight percent error rate on their payroll. The research further points out that an average of 4 hours and 5 minutes are wasted per employee per pay period taking long lunches, being tardy and leaving early.

In the light of these statistics, let us have a look at the advantages of using time attendance software:

Accuracy and reliability:

Employee time and attendance tracking systems are accurate, reliable and provide a great deal of accountability. While the possibility of time theft becomes absolutely zero, this makes the job of payroll processing easier for business accountants and the human resources personnel. The quick and accurate time and attendance records translate to significant savings in the long run and ultimately a healthier profit margin.

Competitive business edge:

With the use of attendance software systems, businesses can gain a clear competitive advantage over their counterparts. In this fast age of information technology, no businesses should leave any stone unturned to be able to leverage every available opportunity to cut overhead costs.

Accessibility and employee satisfaction:

Having the attendance system easily accessible by the employees is very helpful for them to view and submit time-off requests, eliminating questions about how much time employees have accrued, and when they may have taken time off. When the employees can track and enter their work time in a transparent way, it affects their satisfaction level to a significant extent.

Eliminates errors and saves time:

Manual record keeping of employee attendance and time is not just time consuming but also prone to the possibility of errors. Moreover, according to popular perception, manual records can easily be manipulated. An automated attendance system, therefore, can be an effective and reliable solution for almost all sizes and types of companies.

Conclusion:

The employment of time attendance software in an organization can add value by helping businesses spot potential problems ahead of time. Using attendance software not only informs the employees in writing about what is expected, but also helps them self-evaluate their commitment to the organization. The cost of investment in the attendance systems is recovered In the long run and businesses eventually end up saving on time, money and efforts.

Benefits of an Online Payroll Software.

By | Business, Cloud Computing, ESI, Human Resource, Leave Management, Payroll, Provident Fund | No Comments

An increasing number of companies and businesses are transiting from the traditional payroll system to online payroll software. The online payroll software offers many benefits over the traditional method and results in simplified, time saving payroll processes. In business, time is the essence related to productivity and development resulting in modernization of processes for maximum benefits. Online payroll software is one such modern tool that brings the required benefits. Here are some of the benefits of an online payroll system.

Payroll Benefits

1. Cost benefits: There are many cost benefits of using an online system for payroll such as you don’t have to pay huge fees or license cost upfront. You pay for only as much as you make use of. On the other hand, buying costly payroll software considering the future scaling-up-needs may just not be required in this case.

2. Easier to use: Data entry is much simpler in an online system. The traditional method involves tedious inputs under various heads for numerous employees and long calculations and deductions in various spreadsheets. Under an online payroll, data entry is simplified and easier, resulting in time saving.

3. Reduces the chance of errors: The online system is automated to quite an extent, hence chances of errors are reduced drastically. Traditional payroll system or the in house payroll may have errors and rectifying them can be very time consuming with reprinting checks or delayed payroll that may result in disgruntled employees.

4. Tax calculation and payment reminders: Online payrolls auto-calculate and deduct taxes according to the requirements under labor law and compute the income tax efficiently for all employees ensuring labor law compliances. Latest online payroll update you with the amendments in concerned taxations and make calculations accordingly, thus eliminating the stress of tax compliances.

5. Easy accessibility: With an online payroll, you can easily access the data from across the world with help of the internet. Thus, computing and processing salaries can be done from anywhere in the world and if your business requires travelling, you can process the payments from across the globe. You can access and amend information globally without the need of your office desk.

6. Simplified sharing: With a modernized online process, employees can access their salary slips, leave and attendance information from anywhere. The process of claiming reimbursements or declaring investments becomes a streamlined task without wastage of HR time. Moreover, all information is stored in one location giving you better control over it. In an online payroll system, there is lesser likelihood of any errors in attendance records, leave adjustments and salary calculations as the data is shared with the employees through the month.

7. Government reporting becomes easier: Government compliances related to employees is a massive task and it becomes much easier with automated online payroll system such as filing of PF, ESI returns with accuracy and on time.

8. Lesser maintenance than in-house payroll system: Online payroll system saves the cost of setting up and maintaining your own in house payroll computer system. Configuration, testing, maintenance will require IT staff and manpower – the online system eliminates the entire process and spares a lot of trouble. The online payroll system comes with technical support and help and in the event you may face any issue, it gets promptly answered by the support staff of the vendor.

9. Easy portability: Some cloud solutions providers might trap their customers through what is known as vendor lock-in where the customer can’t move the data to another service provider because of the proprietary software used by the first vendor. It is important to ensure that there is no vendor lock-in in your cloud services subscription.

The online approach to payroll processing has numerous advantages like time savings, meeting deadlines more easily, quick access to data, efficiency, error-free calculation and cost effectiveness. With improved processes, both the employer and the employee feel satisfied and productivity is augmented. A big headache of payroll and compliances can now be easily handled leaving HR with more quality time for efficiency without having to spend hours on data entry and calculations and numerous spreadsheets. If your company hasn’t already adapted to the new payroll way, it is about time to change the old ways!

Benefits of Payroll Automation for SMB and Startups

By | Business, Cloud Computing, ESI, Human Resource, Payroll | No Comments

Whether you are a start up or SMB, automating payroll brings lot of benefits to your organization.

Reliable System: – Its important for any organization to have a system in place which both employer are employees trust, which is transparent. Having a trusted payroll system in place will keep everyone happy at the end of the month.

Accuracy: – Automating payroll keeps you away from embarrassing moments. Off course you have to setup the system right as per your needs and give it the right inputs.

Statutory Requirement: – Another important benefit of automating a payroll will save you from taxman. It helps you stay compliant with the latest rules and regulations.

Sharing Information: –Once you are through with the payroll calculations, you need to share this with your employees. Having a cloud based payroll enables you to share this information easily. Employees can simply log in and check their payslips and other details.

Save Time: –Moving to a automated payroll system requires one time effort to set it up as per your needs. As you have to pay your employees every month, automation does speeds up your work allowing you to focus on your business, rather than running the payroll.

Bespoken Payroll Software is Essential

By | Business, Cloud Computing, ESI, Payroll | No Comments

When you are striving to keep your organization steady in a slow economy, it is difficult to envision the significant contribution of payroll software in keeping you steady. In a slow economy it’s critical you stay organized. Having the right talent in your team is the only way you can make things happen in a long run. You need right set of tools to ensure you keep your employees happy.

It’s enticing to use some basic tools to keep track of how much you need to pay. You may think having a simple spreadsheet or a register to track how the days or hours worked by an employee. You end up compiling and summarizing this data at the end of month to know how much you need to pay. This method not only consumes your precious time and effort, but also leaves doubts in your employees mind about the accuracy of your calculations.

You surely need transparent and easy to use payroll software which can be trusted by the management and the employees. If you do not have a payroll software right from the start, which can be scaled out easily when you grow, can cost you heavily if you plan to have later. Have a payroll software that is scalable, transparent and easy to use. Cloud payroll can help you just achieve this.

By having a payroll software right from the start you are investing in the way you should run your business. This money spent is not for something that is needless. Having easy, transparent and collaborative cloud payroll software not only ensures your workforce is happy but also makes you tax compliant. It makes sure your tax calculations are accurate and you file all your forms and returns on time.

If you already have a payroll software that fits the unique needs of your business then CONGRATS!!! Else start looking for one NOW.

ESI – Coverage

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COVERAGE UNDER THE ESI ACT, 1948

Under Section 2(12) The Act is applicable to the factories employing 10 or more persons irrespective of whether power is used in the process of manufacturing or not.

Under Section 1(5) of the Act, the Scheme has been extended to shops, hotels, restaurants, cinemas including preview theatre, road motor transport undertakings and newspaper establishment employing 20 or more persons.

Further, u/s 1(5) of the Act, the Scheme has been extended to Private Medical and Educational Institutions employing 20 or more persons in certain States.

The State Govt. has been requested to issue notification under Section 1(5) on the lines of Section 2(12) keeping the threshold limit for coverage as 10 employees instead of 20.

The existing wage-limit for coverage under the Act, is Rs.15,000/- per month (with effect from 01.05.2010).

AREAS COVERED

The ESI Scheme is being implemented area-wise by stages. The Scheme has already been implemented in different areas in the following States/Union Territories

STATES

All the States except Nagaland, Manipur, Tripura, Sikkim, Arunachal Pradesh and Mizoram.UNION TERRITORIES Delhi, Chandigarh and Pondicherry

COVERAGE :

Coverage(As On 31 st   March, 2010)
No. of Insured Person family units 14300000
No. of Employees 13896150
Total No. of Beneficiaries 55484000
No. of Insured women 2600250
No. of Employers, etc 406499

Know More Employee State Insurance – ESI