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PAYROLL MANAGEMENT SYSTEM

Macreel Vetan Module has a highly flexible, configurable and customizable engine. It integrates all forms of payouts to an employee. Monthly salary, Claims and reimbursements, LTA, Bonus… it covers every possible employee compensation mode. The system pulls relevant data from the time and attendance module, leave management module, claims and reimbursement module etc. as applicable using the self-service portal and uses it as the input for salary calculation. In a semi-automated scenario, all or part of the data can be uploaded using a master upload template. Built in audit and approval trails, security locks, a wide range of standard and customized reports are some of the features of the module. While Macreel Vetan highly trained professionals process the payroll from their premises in a timely and accurate manner, the product engineering team constantly updates the system with robust patches to address the impact of frequently changing tax laws. Macreel Vetan manages all statutory compliances like PF, PT, ESIC, Shop and Establishment Act, Factory Act, Payment of Bonus Act etc. with timely filing and periodic reporting. Macreel Vetan conducts system and process audits to make sure that your organization is 100% compliant.


WHAT ARE THE TYEPS OF SALARY COMPONENTS IN THE SALARY/CTC OF AN EMPLOYEE ?

The Various types of components are
Earnings - e.g. Basic, HRA, allowances
Deductions - e.g. Loss of Pay, Notice period deduction, Loan recovery
Statutory - e.g. Professional Tax, Provident Fund, Employee State Insurance, Tax Deducted at Source, Labor Welfare Fund. Usually these are always deductions
Reimbursements – e.g. Medical, expense reimbursements. Some are part of payroll and some outside payroll


WHAT ARE THE USUAL SALARY COMPONENTS IN THE SALARY/CTC OF AN EMPLOYEE ?

Based on a combined reading of the applicable labor laws and Income Tax Act, these are the mandatory salary components for most of the Indian companies

Name Type of Components Remarks
Basic Earning Is a taxable component. Forms the basis for multiple things – Minimum Wages Act, to arrive at retirement benefits, PF contributions, HRA deduction, leave encashment etc.
HRA ( Housing Rent Allowance) Earning Can be paid to all employees –whether or not they stay in a rented house. Will be fully taxable for people not living in a rented house. A deduction is available for people staying in rented accommodation.
Conveyance, Medical allowance Earning Usually tax deductible in the employee’s hands.
Income tax ( called TDS) Deduction TDS is the part of the income tax payable by the employee on his annual salary and is deducted by the employer before paying the salary
PT, PF, ESI Deductions Are the labor law deduction components. These kick in based on certain criteria. For more information on these and other labor law compliance and deductions, visit the section on labor law compliance


WHAT IS THE TAXABILITY STATUS OF VARIOUS SALARY COMPONENTS ?

Component Taxable Comments
Basic Fully taxed. No deductions Only considerations are from Minimum Wages Act and PF Act. The Gratuity calculations are based on “Basic” wages.
HRA Taxed. Exemption to the extent of lower of below allowed
actual HRA received
rent paid in excess of 10% of salary (Basic +DA)
40% (50%) in Metro cities of salary
Optimum % of basic – 50%.
Minimum % of basic – 40%.Employer to collect ALL 12 months rent receipts signed by employees’ landlord before giving HRA deduction. It is recommended that the employer also insist on the lease agreement if the monthly rent crosses 10,000 Rs p.m.
More information can be had from the attached document
Conveyance Allowance Exempt upto Rs 800 per month Transport allowance provided to an employee for commuting between his residence and the place of his duty
Medical reimbursement Exempt upto Rs 15,000 p.a Please refer attached document
Leave Travel Allowance Taxed. Exemption twice in a block of 4 years when employee actually travels. Please refer attached document
Flexible Benefit Plan / Special Allowance Not taxed if supported by correct documentation. No minimum or maximum amount for this head. Usually this is the balancing figure to arrive at CTC. Amounts not supported by bills are fully taxed as special allowance. See the write up on FBP.
Provident Fund Not taxed Employer stands to benefit if PF contribution is restricted to 12% on Rs 6,500 instead of actual Basic. Employee benefits if the company’s contribution is on the full basic. If CTC is a criteria, Special allowance can be lowered and full PF can be contributed by the company.
Any other allowance by whatever name called Fully taxed


WHAT IS MEANT BY CTC

CTC stands for Cost to company. CTC includes all those costs which an employer incurs on an employee. Typically, apart from including all the salary earning components, variable pay, bonus, commissions, etc, employer’s contribution to Provident Fund, ESI, super annuation, gratuity, medical insurance etc is included in CTC.


WHAT IS MEANT BY GROSS SALARY, NET SALARY AND TAKE HOME SALARY ?

Gross salary stands for the total of all earning components in the salary and includes those components that are not paid out in cash like Food Coupons.

Net Salary and Take Home salary means Gross salaries reduced by all deductions on account of PF,PT,ESI,TDS, Loan deductions etc. This is the amount which gets credited to your bank account each month.


WHAT IS FBP?

FBP stands for Flexible Benefit Plan and signifies a benefits plan that allows employees to select from a pool of choices, some or all of which may be&nbsp tax-advantaged Typical components include telephone/mobile reimbursement, fuel expenses reimbursement, vehicle lease, books of professional interest, food coupons etc. The components of a FBP are usually tax free as they are in the nature of a reimbursement and is paid out on submission of bills by employees. The portion of FBP which cannot be supported by bills is paid out to employees but taxed as special allowance.

FBP as a term is also used by companies which offer the flexibility to employees to choose the salary components. The employer in this case would fix the CTC and some rules to pick and choose the earning components and even change them mid year.


WHAT ARE THE FACTORS TO BE KEPT IN MIND WHILE STRUCTURING / PAYING SALARY ?

To keep it simple, you need to keep in mind the various labor law compliances and income tax provisions in mind while structuring / paying salaries.
The list of various labor law compliances are as follows. Please note that there are different criteria for getting covered the labor laws and all may / may not apply to you.

  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • Employees’ State Insurance Act, 1948
  • Profession Tax Act ( state specific)
  • Shops & Commercial Establishment Act ( state specific)
  • Minimum Wages Act, 1948
  • Payment of Wages Act, 1936
  • Payment of Gratuity Act, 1972
  • Payment of Gratuity (Central) Rules, 1972
  • Factories Act, 1948
  • Contract Labor (Abolition & Regulation) Act, 1970
  • Labor Welfare Fund Rules, ( state specific)
  • Payment of Bonus Act, 1965
  • Payment of Bonus Rules, 1975
  • Equal Remuneration Act, 1976
  • Equal Remuneration Rules, 1976
  • Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959
  • Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960
  • Industrial Establishments (National and Festival Holidays) Act, ( state specific)
  • Weekly Holidays Act, 1942
  • Maternity Benefit Act, 1961
  • Maternity Benefit Rules, 1963
  • Workmen’s Compensation Act, 1923
  • Workmen’s Compensation Rules, 1924
  • Industrial Employment (Standing Orders) Act, 1946

 

From the income tax angle, you need to see what components are fully/partly taxed/exempt and structure the pay components accordingly. Look at the table “taxability of various salary components” for more information on this.

Both the labor law and income tax compliances require you to follow certain rules, file periodic returns and pay certain fees/taxes.

Laws and Rules keep getting updated/amended. It is suggested that you keep abreast of the latest changes to be fully complaint.


PAYROLL AND LEAVE MANAGEMENT SYSTEM DOCUMENT

Benefit of Payroll Software

Why should you use Customized Payroll Software?
Your business is unique. A readymade payroll software might not meet all your specific business requirements. Developing a tailor made payroll software solution for your organization will eliminate the risk of non compatibility of the software with the system. Call us +91 98731 65085, help you automate your payroll system to match your business policies, the laws and regulations, and specific needs of your organization.

Orange Human Resource & Payroll software is web based software allows organization to generate pay slips and salary register, based on the attendance of the employees taking care of leaves, overtime, allowances, loans, advance, bonus, encashment and other standard deductions like Provident Funds, E.S.I.C, P.T, Income Tax, LWF NHIF, NSSF, PAYE, LST( for international Payroll) etc.

Major Modules

Leave Management

Employee Profile User Defined Leave types
Leave Management System Leave Application
Time Management System Leave rules
Employee Transfer, Promotions & Increments Leave Approvals
Reimbursement Management MIS Reports

Employee Profile

Employee Joining Information. Probation Confirmation details.
Employee Profile. Employee Current position and job profile.
Family background details. Employee Local address and References details.
Employee Emergency details. Employee Qualification and experience details.
Awards given to Employee and their Children. Documents submitted by employee.
Employee Club Membership Profile. Assets given to employee.
Employees extra Circular Activities etc. Employee Training details.
Canteen Info Holidays Info (Fixed / Non-fixed)

Time Management System

Overtime Details Employee Shift Manage
Manual Attendance done By Employee details Overtime on Overtime
Week of Adjustment (employee wise) Monthly / Yearly Leave Carry Forward
Late Coming, Early going, travel on Duty etc  

Payroll Management System

HRD Procedures

User defined Salary Heads Final Settlement
Professional Tax Slab Superannuation
Pay slip Generation PF Challan
Salary formula Gratuity
Create your own Salary Structures Tax Calculation

Transfer, promotion & Increments

Transfer Details (Shift / Department) Promotion Details (Post / Salary)

Company Reports

Company Details Contractor Details
Company Holidays Bank Details
Leave Types Detail Bonus Types
Professional Tax Details  

Leave & Attendance Reports

Employee Leave Application Used Leave Detail
Employee Leave Approval Leave Closing Yearly
Leave Balance Credit Days
Late Coming Leave Encashment
Late Sitting Attendance Detail
Early Going In out Summary
Compensate off Details Attendance Summary
Shift Details Present Employee wise & Date Wise
Employee Current Shift Absent :Employee wise & Date Wise
Overtime Details Holiday Work
Employee Total Over Time Hour Current Present Employee
Daily Attendance Report Device In-Out Detail
Daily Absent Report Leave Closing as on Date
Monthly Attendance  

Employee Reports

Employee Joining Information Emergency Address-Contact Details
Employee Probation Details Birthday List
Employee Profile Employee Training History
Employee Salary Structure Employee Mail Label
Transfer/Promotion Details Allowance Deduction Report
Salary Increment Details Salary Structure
Resigned Employee Details CTC
Department wise Employee List Week Off
Blood Group Employee List Enrollment Report
Family Background Details  

Payroll Reports

Salary Heads Detail Salary Cheque Statement
Monthly Salary Register Salary Slip
Salary Statement Depositing in Bank Bonus Details
Salary Cash Statement Conveyance Details

Taxation Reports

ESIC Challans
PT Challans
Form6A(Employees Yearly PF Contribution)
Form-3 (For Professional Tax)
Form12A(Revised)-Employee's Monthly PF Contribution
Form3A Details of Employees Pension Fund Scheme-Yearly
Form-10(Employee's PF Organization for Resigned Employee's
PF Challans
TDS
PF Statements
Chart Report  

Salary Reports

Salary Muster(Accountant) Bank Statement
Salary Sheet Bank Transfer Statement
Online Time Bank Recovering Statement
Salary Summary Reimbursement Detail
Allowance(Deduction)  

PRODUCTS

Macreel Vyapar For Details: macreel.com/Product.html Category: ERP
Macreel Payroll For Details: macreel.com/payroll.html Category: ERP
Leave & Travel For Details: macreel.com/leave-travel.html Category: ERP
Macreel Siksha For Details: macreel.com/siksha.html Category: ERP







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