Category Archives: Payroll

Why is online attendance management system important?

By | Cloud Computing, Employee Attendance, Leave Management, Payroll | No Comments

Attendance management system holds great relevance when we talk of productivity at workplace and profitability of an organization. Tracking employee attendance can help a company grow and prosper in its respective business domain. It further ensures efficient and smooth operations.

online attendance management

Take the case of an employee working in the accounts department of an organization whose office timings are from 10 in the morning till 6 in the evening. If he reports late to office regularly but leaves on time, it is quite likely that he will not be able to complete his regular tasks on time and that too with perfection. This, in turn will hamper his performance as well as the company’s overall productivity.

In such instances, the online attendance management system will help the human resource department keep a tab on the chronic late-comers, talk to them and check the issue. Earlier, when the employee attendance was recorded either manually using pen and paper or in excel spreadsheets on the computer systems, it was not so easy to identify the late-coming employees. With delay in access to metrics on attendance in legacy, there was always a negative impact on productivity of the employee in question, the respective department and the organization as a whole.

Tracking Employee Performance

An efficient and effective online attendance system helps the human resource employees to learn which employees avail the maximum leave, leave without intimation or approval from their reporting managers or leave the workplace in the middle of the day.

Online attendance management system plays a key role in the accurate computation of salary. Several sectors such as media and Information Technology (IT) require their employees to work in shifts for meeting the work schedules and project timelines. The cloud-based attendance system will enable the respective employees of the human resource and finance division to do the calculations with precision, with almost negligible possibility of causing errors. As a consequence, it will not generate dissatisfaction among the workforce and they will be motivated to give their best to whatever task they undertake.

Simplified Process with Automated Calculations

Online attendance and payroll has simplified the lengthy and complex calculations involved in computing overtime and variable pay components which otherwise were very time-consuming and in most of the cases, the chances of discrepancy were high.

Enforcing Discipline

Another benefit of migrating to online attendance system is that it will help enforce a sense of discipline and punctuality among the workforce. Work ethics cover principles such as adherence to the company policies, mutual coordination and support, commitment towards organizational goals, and taking up the responsibility for one’s work. Attendance is also an indispensable part of the code of ethics at the workplace. If an employee in a specific department reports late to work, other employees in the department may also start following a similar trend of coming late to office. This disturbs the coordination and collaboration among the employees within the department, as a consequence of which, work is affected.

Doing Away with Paperwork and Filing

Previously, in the absence of online attendance management system, the organizations had to maintain multiple registers, which made it quite difficult for them to keep track of the employees’ daily in-time and out-time. Thus, it was very tedious and time-taking task to ensure punctuality in attendance.

Boost in Productivity

Being punctual and reporting on time enhances the productivity of a business enterprise. Reporting to work on time will ensure timely execution of the assigned tasks in a seamless manner, enabling the company to scale great heights in its respective industry of operation. The efficient attendance system brings commitment and professionalism to the workplace along with punctuality. It also generates goodwill among the employees.

Easy Remote Access

Moreover, a cloud-based attendance management system will make all the employee attendance details available at one place that can be accessed by the employees from anywhere. This will reduce their dependency on HR department employees for information and will lend more transparency to the entire system.

The evolution of online attendance management system has done away with the hassles and tediousness of the traditional modes of employee attendance records such as manual entries and record maintenance on excel spreadsheets. It has revolutionised the attendance system, thus improving the productivity of the organization without compromising on the employee motivation.

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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esic
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.

Online Leave software helps analyse employee’s leave trends

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

Employees are the productive assets of an organization. However, increased absenteeism adversely hits the profitability of an enterprise, irrespective of whether it is a small and medium enterprise (SME) or a big corporate house.

Take the case of an employee working on a highly critical project, wherein the project deliverables have to be delivered to the client on a weekly basis. All of a sudden, the respective employee goes on leave citing some personal reasons. Now, the company is faced with a catch-22 situation wherein it does not know how to meet the project deadline with no available resource as a backup. As a consequence, the project deliverables are either delayed or they are delivered on time albeit with compromises on quality. In turn, it is likely to impact the company’s name and reputation with the client. At times, the word might go across the specific market segment of company’s business line.

OnVacationPost

To minimise the instances of employee absenteeism leading to declined productivity and adverse hit on company’s image in its segment of operation, some concrete steps must be taken to ensure the availability of resources for critical deliveries. Keeping a record of employee’s leave trends could be a starting point to study the leave patterns before planning for back-up resources.

Analysis of the leave trends will help the enterprise to learn about the leave patterns of the respective employees. Studying the leave patterns of an employee over a period of time will give the company an insight into when the chances of that employee going on leave are the highest.

However, keeping track of leave trends of the employees on an excel spreadsheet through charts such as line charts and column charts, diagrams and tables is tedious, time-taking and more vulnerable to making mistakes.

To make optimal utilization of time, efforts and enhance productivity of the employees in the human resource department, the business houses are migrating to online leave management software.

Online leave software will free the enterprises of the hassles related with analysing the employee’s leave patterns manually or through excel spreadsheets. Such a software application will allow the human resource employees to know during which months, absenteeism rates are high and when attendance at the workplace is maximum. Generally, it is observed that most of the employees take leave during festivals and also when a working day falls between holidays so that they can plan a long vacation with their family and friends. In companies where the employee’s current leave balance lapses at the end of the calendar year or the financial year, the employees often go on leave around that time to exhaust their remaining leave balance.

A robust, cloud-based leave management software will let the employees generate reports and dashboards, which will shed light on the frequency of leave that each employee avails. It shows the days when absenteeism is high in almost all the verticals of the enterprise. For instance, Monday and Friday in a business operating five days a week, or Saturday in other cases, may record the maximum number of absentees with employees enjoying an extended weekend.

The leave software will allow the employees in the HR division to predict whether the respective employee generally goes on a one-day leave, three-four days leave or a period of leave stretching beyond one week.

With all the employee leave information (leave balance, frequency of taking leave, number of leave taken in that particular month) at one place, the human resource employees can come to know when two or more employees working in the same project are going on leave around the same time. In this case, they can talk to the employees in question and come up with a solution in the best interest of the employees, also falling in line with the organization’s objectives.

Using the leave management software, the HR employees can conduct a comparative analysis of the leave availed by the employees working in different departments at different times of the year.

Online leave software helps the employees in the HR department know the frequency of leave taken by employees sitting in other locations in the country, with the organization having their business operations spread across different zones.

The leave trend analysis is done with 100 percent precision and the chances of errors are negligible with a reliable payroll and leave management system.

Online leave software has made it simple and easy for the enterprises to monitor the leave trends of the employees, helping the enterprise meet its strategic objectives by leveraging on the available headcount information. As a result, the organization’s productivity, revenue accruing from sales and also customer service will improve considerably, helping to win the clients’ confidence unmistakably.

Is Time & Attendance delaying your Payroll?

By | Employee Attendance, Leave Management, Payroll | No Comments
Time-Money

Time & Attendance is key input for your Payroll. Human Resource and finance departments in any business organization spend ample time to collect Time & Attendance data and process payroll. Employees are the backbone of a business enterprise. Any irregularity in their salary or leave calculation is most definitely going to generate unrest and dissatisfaction among them and will eventually affect the functioning of the enterprise. Payroll system covers sensitive employee information with respect to their remuneration, timesheets, time & attendance and leave records, and also taxes and deductions, whenever applicable. Timesheets and maintenance of attendance records are central to payroll processing, so it must be calculated with 100 percent accuracy and precision.

Earlier, when the processes were not automated, the business firms had to keep a record of the employees’ confidential information manually. The employees’ in/out timings were recorded in physical documents that were used for salary processing at the end of payment cycle. In addition to the employees’ in and out timing, other time and attendance factors to be taken into account for payroll include shift differentials and overtime calculation. But, before this, the timesheets need to be approved by the reporting managers of the employees, which take up time as well as efforts of the respective department in charge of it. Now, another catch in this scenario is that the employee may be reporting to more than one manager simultaneously. This will make the entire process cumbersome.

The HR department employees are also charged with the responsibility of furnishing the approved timesheets and accurate time and attendance details to the finance department employees on time, thereby avoiding any delays in salary processing. A slightest error in its computation could have an impact on the employees’ compensation.

In the manual payroll processes, the employees in the HR department experienced problems in accurately tracking the start/end timings of the employees with respect to their specific tasks as well as a detailed breakdown of the tasks. Further, the timesheets hold due relevance in recording start/end timings related to the particular tasks and projects they are handling within a business enterprise.

Likewise, the employees’ time and attendance records were also maintained manually, raising the chances of committing errors a little further again. Let’s consider a scenario here. If some of the employees forget to sign in the attendance register or get the flexibility of working from home, there could be a possibility that the corresponding entry wouldn’t have been made in the register, it is assumed that the employees was on leave on that particular date. This might result in leave or salary deduction for the employee and lead to employee dissatisfaction towards the payroll management department. In either case, it is a lose-lose situation for the employee as well as the employer.

Migrating from manual processes of recording time & attendance to maintaining details on electronic spreadsheets also did not solve the problems of the employees working in the human resource department. Though, it offered them some relief as all the calculations could be done in the spreadsheet using formulas and all the information was available at the click of a mouse.

With so much competition in every sphere of business, the enterprises resorted to cloud computing, the emerging trend in Information Technology (IT) to automate the time and attendance tracking of their employees. Cloud-based software offers the firms ample benefits that bring a significant impact on their business such as a reduction in their operational cost and effective time utilization, thereby improving productivity.

Migrating to cloud-based software applications significantly brings down the enterprise’s expenses incurred on IT, which includes installation, configuration and maintenance costs.

Working on cloud applications saves the time and efforts of the HR department employees, who can devote that time to other more important and productive tasks, based on priority.

Cloud lends the HR department employees the flexibility to approve timesheets from any remote computing device with internet access. The Finance department employees can also export data for salary processing to the payroll system from any place they can access internet.

Moreover, Cloud-based time & attendance software gets upgraded automatically without any effort on the part of the subscribing enterprises. These system upgrades come without incurring any additional cost, over and above the subscription fees.

Switching to cloud computing enables the business enterprises to carry out the payroll processing smoothly and efficiently. It ensures calculation of timesheets and attendance with accuracy and precision, making the cumbersome processes simpler. With the manifold benefits of cloud-based time and attendance software discussed above, your business ventures can boost their operational efficiency by a substantial decrease in cost and optimum utilization of time.

Brio is featuring in 25 most promising cloud computing companies in India

By | Cloud Computing, Google Apps, Payroll | No Comments
SI-feb

Silicon India, a prominent business and technology magazine has identified 25 most promising cloud computing companies by taking into account various parameters that are measurable indicators of their performance. The editorial team of Silicon India, in coordination with the industry veterans, conducted a detailed analysis of the business processes and the services offered by the selected companies, and then ranked the firms that did incredibly well in their respective sectors in the year 2014.

The Silicon India magazine, available in both, print and digital versions is the largest portal of Indian professionals and is the most reliable source for business and Information Technology news. It keeps the readers abreast of the recent trends and developments taking place in the IT and business sector. The leading magazine is available in U.S. and Indian editions.

In the current scenario, with new start-up companies every other day and the existing companies expanding and diversifying their product lines to keep pace with the intensifying competition, it becomes difficult to pick those that meet all the requisite criteria to be listed as fastest growing companies.

Normally, any business enterprise that earns profits from its current product lines is said to be successful. However, profit margins are not the only determinant of the growth of a business firm. A business enterprise that offers products and services benefiting the workforce and the customers is, in essence, a growing company in all aspects.

Before coming up with this comprehensive list of the fastest growing companies in India, the expert panel of industry professionals including the magazine’s editorial board considered the in-depth industry exposure, benefits offered to the customers, the latest cloud computing technology used and the proven expertise in its respective line of business of the companies. The list covers start-ups as well companies that have already carved a niche for them in the corporate world.

The Silicon India list features the names of firms having a presence in different zones of India and also includes U.S. based firms. For instance, SmartData Enterprises, Blue Pi Consulting, NEC Technologies, ValueProspects are based out of Punjab, Gurgaon, Noida, Ghaziabad and New Delhi respectively. The list further includes Elixia Tech Solutions, IBN Technologies, Infinient, Locanix, Pinnacle Teleservices having their offices in Mumbai, Pune, Goa, Ahmedabad and Nagpur respectively. In addition to the Indian companies, some U.S. firms also have their names featured in the list for instance SupportMart Technical Services and CipherCloud in New York and San Jose respectively.

All the companies whose names featured in the Silicon India list have deployed the recent cloud computing technology to give the maximum benefits to their clients, spread across the globe, by optimizing their performance, thereby saving expenses as well as time.

Brio Technologies features in the Silicon India list of fastest growing companies.  Brio offers desktop and cloud-based enterprise IT solutions to its clients. In a span of just one decade, the Hyderabad-based company has come a long way in establishing itself as a premier provider of efficient cloud-based products and services, also making its presence felt in the business press.

Brio started its operations by offering its customers comprehensive attendance and payroll software. Later on, it expanded its business operations by venturing into building and deployment cloud-based enterprise IT solutions. The company—in an endeavour to diversify its offerings—has recently introduced cloud-based online payroll solution, which incorporates employee information regarding leave, payroll, loan, attendance. In addition to these features, the new online payroll solution includes deductions by way of taxes as well as statutory compliances.

Brio’s cloud journey began with the partnership with Google. Brio is among the top Google for work partners in India. Brio offers services for Google for work earlier know as Google for Business.

The highly efficient cloud-based services by Brio have recognized it as a trusted name in the sphere of cloud computing service providers. Its premier offerings have earned the Indian firm a place in the Silicon India’s list of promising cloud computing firms.

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.

Why buy software when you can rent software?

By | Human Resource, Payroll | No Comments
Buy Rent

The prime objective of a business enterprise is to maximize productivity in minimum time and reduced cost, thereby resulting in higher profit margins. For this, they need to do an assessment of their capital and operational expenses and figure out whether it would be in the interest of the enterprise to buy or rent the resources required to carry out the operations. These resources aren’t limited to office furniture or computers. Today, it extends to software that a company uses for managing work and other resources. Therefore the question: Why buy software when you can rent it?

CapEx vs OpEx: Buying a software license for a company is a capital expense and involves high up-front investment. When a firm buys software, it must also spend on resources required for software installation, troubleshooting as well as maintenance activities. This might incur some degree of overhead costs. Rental software saves the business enterprises from paying a high upfront cost at the beginning. The expenditure incurred on rent for the software comes under operational expense of the enterprise. This also leads to tax saving, thus benefiting the organizations.

Agility to respond to market changes: The advancement in the technology domain and the changing business requirements make the installed software become obsolete over a period of time. The enterprises striving to meet their business goals are left with two options – either to replace the existing software with the new software or to upgrade the current software. Going with any of the options involve an additional company expense, having a direct influence on the company’s profit margins. However, rented software offers the enterprises with latest software upgrades that have been rolled out recently, without charging any additional fee.

Improved service and cost-efficient technical support: Purchasing software by a business enterprise entails an additional cost of maintaining the software application. Rented software offers the business users with enhanced service and technical support, thus saving the organization from the human efforts, time and costs that otherwise account for in-house software maintenance.

Pay-as-you-use: The business firms will be required to pay the rental charge for accessing software on the systems on which it has been installed. This is very helpful in tackling scalability issues.

It might also help business enterprises in challenging situations when they need to lay off some of their workforce. If the firm purchased the software, it would continue to pay for it irrespective of the number of employees utilizing the software licenses. But, when the firm rents software, it can cancel the software subscription on those servers and computer systems in use by those employees, saving costs. Alternatively, in case of a seasonal spike in workload, a company might need to increase the users for a short period, which can be done easily by paying more for that period and then scaling down.

No vendor lock-in: Earlier business firms were left with no option but to buy software license from vendors for running business processes smoothly. This made the business users dependent on their software vendors for products and services. Now, with the advent of cloud, many software firms are offering software licenses to business enterprises on rent or pay-as-you-use model to help reduce the impact faced by companies in buying software. By renting software, an enterprise can get the software installed and removed on any number of computer systems depending on the firm’s business needs. It is more convenient for the business firm as compared to purchasing a software license. Most importantly, the buyers are given the freedom to move to other vendors without worrying about any lock-in clauses related to data or migration costs.

Flexible payment options: Rented software also lends flexibility to the companies with regard to the payment options. The enterprises can make payments for the software on monthly, quarterly as well as yearly basis.

In a nutshell, getting software on rent is a profitable proposition for a business enterprise since it does not involve high up-front costs or long-term commitment, thus saving both time and money, leading to increased productivity. Taken together, rented software can play an instrumental role in helping the firms meet their business objectives.

What is CTC? What is Take home Salary?

By | Employee Attendance, Leave Management, Payroll, Provident Fund | No Comments
What-is-CTC

Business organizations are bound by an obligation to pay their employees a particular sum of money in return for employees’ services to the company. For the employers, this sum of money, called salary, can be described as the cost of acquiring and retaining human resources for running business operations. From the point of view of the employees, salary can be viewed as the money and/or benefits earned under the employer-employee relationship to meet their personal expenses.

Usually, the salary for all employees performing similar work in similar industries in the same region is in a particular range. They are governed by the market pay rates and the minimum permissible wages according to the laws and regulations governing the area of operations. But, it should be understood that specific skills, competency and certifications are factors that may result in difference in salary structures.

It is common knowledge that salary consists of basic pay, housing allowance, dearness allowances, and others. While some allowances are taxable, others are either fully or partially exempt. New entrants of the corporate world may be fascinated at first by the astronomical salaries that they are hired at. But they are often disappointed when their first salaries turn out to be lower than their expected calculations.

So, what makes up for this difference? It is necessary to understand that the take home salary is not what is mentioned on your appointment letters. Let us discuss some aspects of the break-up of your salary structures to be able to make out the difference between similar sounding technical terms related to salary.

What is CTC?

Cost to Company (CTC) is in fact the salary package that is offered to an employee. What most employees do not understand in their first jobs is the fact that the CTC is an indicator of the total amount of expense that an organization is incurring for an employee in a year, including all the facilities an employee is getting during the service period.

This means that the CTC is not the actual salary of an employee, but a sum total of all the costs associated with an employment contract. It signifies the cost that a company would incur on you as an employee. Quite surprisingly, a major part of CTC comprises of compulsory deductibles, including those for provident fund, medical insurance etc.
It is to be noted that the salary and other perquisites that your company pays you, actually translate to some cost for them and hence the term. So, they form a part of your compensation structure but you do not get them as a part of in-hand salary. In other words, benefits increase your CTC, but they do not increment your net salary.

What constitutes your CTC?

Your basic salary, Dearness Allowance (DA), HRA, Medical Allowance, Conveyance Allowance, Medical Allowance, Incentives and bonus all come under the direct benefits that you get from your employer. These direct benefits coupled with indirect benefits such as Interest free loans, Food Coupons, Medical and Life Insurance premiums paid by company, Income tax savings, and Company Leased Accommodation and saving contributions such as Superannuation benefits, Employer Provident fund Contribution, and gratuity form your total CTC.

As a rule of thumb, CTC = Direct benefits + Indirect benefits + Saving Contributions

What is Take Home Salary?

Take home salary is the amount of money that an individual actually receives after the employment taxes and the cost of benefits and retirement contributions are deducted. While your gross salary is the CTC minus other benefits, your net salary can be calculated by making deductions such as income tax, Social Security and Medicare taxes, contribution to provident fund and so on from your gross salary.

Your take home salary is usually the net salary unless there are some personal deductions like loan or bond repayments, in which case, it becomes even lesser than your net salary.

Take Home pay = Direct Benefits – Income tax – Employee PF – Other deductions, if any

Why is there a difference in CTC and take home salary?

A common reason for difference in the CTC and take home salary is that some portions of your CTC, such as Gratuity, Employer provident fund and Superannuation benefits are added to your long term savings account but do not add up to your monthly take home pay. The other reason of reduced take-home salary is that the income tax is deducted at source by your employer, generally referred to as Tax Deduction at Source (TDS).

So, before being taken away by some seemingly lucrative new job offer, or when considering a salary appraisal or promotion raise, employees should look at what their take home salary will be and not their plump CTCs. Employees should also ensure that they have calculated their tax liabilities with the new income in accordance with the tax policies to figure out the amount they will receive in their paychecks.

We hope this post clears the doubts around understanding the salary break-ups and jargons. All the best for exciting new job offers and pay raises!

Payroll System in India

By | Employee Attendance, Leave Management, Payroll | One Comment
Simplify Payroll

Payroll System is one of the core functions of a business enterprise. It entails working out all the details pertaining to the compensation of the employees which include attendance management, leave management, advances, taxable deductions, and statutory compliance in accordance with the company policies. Payroll System in India could become complex due to many laws enforced on organizations.

Payroll is a crucial human resource function as a slight discrepancy in salary processing might generate dissatisfaction among the employees, resulting in decreased productivity, efficiency, and also high turnover rate.

Earlier, payroll management in India, was done involving a lot of paperwork which was a cumbersome procedure to follow for the employees of the human resource and finance department. Apart from documenting and managing files, the chances of committing errors were high. This procedure was time-consuming and impacted the overall productivity of the company.

Apart from disseminating paychecks to the employees, a lot of time went into other areas of payroll management such as calculating tax deductions, statutory compliances, and working out employee benefits.

This system of payroll management was also not very convenient from the employees’ perspective. Since this system did not lend much transparency to the employees with respect to their attendance and leave details, deductions from the salary by way of taxes and absenteeism, they had to depend on the HR and finance department employees for information. Flipping through numerous files to respond to the employee queries was again a time-taking task.

With the advent of information technology, the companies in their endeavour to make the payroll less tedious and to avoid paperwork, switched to spreadsheet applications such as Microsoft Excel. The employees of the concerned department were able to process payroll in a better way and it consumed less of their time. The spreadsheet made calculations simpler and quicker for the employees as it features formulas and other essential tools such as VLOOKUP and pivot tables for managing large amounts of data.  It also brought down the chances of making mistakes to some extent.

Payroll management on an Excel spreadsheet allowed the employees to get all the information they want with regard to their salary processing, deductions, attendance and leave management faster and with more accuracy. Though, payroll management done on an excel spreadsheet somewhat simplified the procedure, it still remained a time-taking and slow process.

This was the time when the companies felt the need to automate their payroll system in an attempt to resolve the day-to-day issues faced by the employees as well as the business enterprise.

The advancement in the sphere of information technology led to the development of online payroll software which helped the companies streamline their payroll management. The payroll software made computation of salary and recording other financial details very easy for the employees in the human resource and finance departments.

A payroll software helps the employees in the HR department to process salaries of the employees faster as compared to the earlier traditional methods deployed for payroll management. This system is more reliable and consistent with 100 percent accuracy. Hence, the chances of committing errors are negligible.

An online payroll software imparts more clarity in salary processing as it classifies salary under different heads such as deductions and gross earnings and leaves no scope for any sort of confusion. It does not require the employees to enter the ad-hoc earnings manually every month as the payroll software considers the same, prior to salary computation. It also efficiently calculates all the deductions pertaining to statutory compliances such as Provident Fund, ESI, and Professional Tax as well as TDS. The data from an Excel spreadsheet can also be imported directly into the payroll software.

With payroll software, it is easier to lend transparency to the employees with respect to their salary computation. The automated payroll management helps them to track their compensation details in terms of deductions that have been made or the ad-hoc earnings that have been added. It also gives the employees the flexibility to view their salary slips online and also take a print of it, if they so desire.

Upgrading to payroll software offers ample benefits to the company not just in terms of saving time, energy and finances, but also in computing deductions, loans, and advances apart from leave and attendance management.

Does Online Employee Self Service Improves Collaboration?

By | Human Resource, Payroll | No Comments
Collaboration

Sustaining a business venture is more critical than starting one. A successful small business can be one that starts from hiring the right people, grows by getting the business idea across to them, and is maintained by building the right brand image in the minds of its clients and target audience.

Businesses, whether large or small, may face a standard set of challenges. But the challenges of a small business are unique in the way that large businesses may have done away with them long ago.

Among the many challenges faced by small businesses today is that of sharing your HR-related information with the employees. The basic information meant for and concerned with all the employees in general, should not only be accessible to all the concerned staff members of the organization, any updates in the information database must be conveyed to them as well.

While changes to the employee details are difficult to be conveyed across all departments, it becomes, even more time consuming to incorporate the information from paper documents to the spreadsheets. For organizations that function from multiple geographically-distributed locations, it poses a greater challenge to be able to collaborate with the teams working from different geographical locations.

A cloud Employee Self Service (Online ESS) solution can be the right choice for an organization facing such a challenge in the functioning of the enterprise. It doesn’t only provide access to all the information anywhere, anytime, but it also provides the flexibility to view it on any device without having to waste hours searching for the requisite employee information.

The employees of an organization implementing the right solutions, especially the HR department that needs information at every step of their functioning, can get it within seconds, without the unnecessary hassle of going through papers and spreadsheets. In this way, the time that they would have otherwise spent on looking for information can be utilized judiciously towards working on the core strategic issues of the growing enterprise and in turn, contribute towards the organization’s growth.

Online Employee Self Service module also makes it easy to update employee details as all the employees of an organization have access to it and can update their information on their own. The individual logins for all employees mean that employees can view and update their information such as temporary, permanent and emergency contact details. In other words, it means that an Online ESS can centralize the data by decentralizing the data entry.

As a value addition, an Online Employee Self Service can be a single tool to view code of conduct, employee handbook, list of holidays and other documents for the new employees. It can also help employees get timely access to the latest news and announcements within the organization and participate in opinion polls for the issues that affect the different departments within the enterprise.

For team leaders and managers, the Online ESS can be a platform from which they can review and approve leave requests and check-in and check-out entry and exit timestamps punched by the employees. This creates a transparent system for approval of leaves, time and attendance which can put an end to confusion and unnecessary delays.

In addition to the ability to view their payslips and statutory deductions, use of an ESS empowers the employees to submit their savings, investments and taxation details online so that they can be made available to the HR or finance department at the time of filing of the annual income tax. Moreover, employees can also download their Form 16 directly from the Employee Self Service making it easy and hassle free to file their tax.

If you are a small or medium business enterprise looking for an Employee Self Service Solution, we at Brio, will be happy to provide our online payroll software that integrates the payroll function with the ESS, loan management, leave management, and time and attendance management. Brio’s Perk online payroll software system can automate the aforementioned complex administrative tasks to provide business owners more time for strategic planning and ultimately greater business growth.