Overview of Payroll Management

The payroll process encompasses essential tasks like tracking employee work hours, calculating wages, and ensuring timely payment via direct deposits to their bank accounts.

Companies also maintain detailed records of payroll components including taxes withheld, bonuses, sick time, overtime pay, and vacation pay within their accounting functions. Additionally, they manage and record deductions for government liabilities such as TDS, Employee State Insurance, Professional Tax, and Provident Funds, ensuring compliance and accurate financial reporting.

Frequently asked questions

What are the various statutory compliance applicable in payroll?

The key statutory compliance requirements applicable in payroll include:

• TDS Deduction for Employees: Ensuring correct deduction of taxes from employee salaries.

• Employee State Insurance (ESI): Managing contributions to ESI for employee healthcare benefits.

• Professional Tax: Adhering to state-specific professional tax regulations.

• Employee Provident Fund (EPF): Administering contributions towards employees' retirement savings.

• Gratuity: Ensuring compliance with gratuity provisions for eligible employees.

What are withheld payroll taxes?

This refers to the payroll tax deducted from employees' paychecks and held by the employer on their behalf. It represents a liability because the employer collects taxes from employees and is responsible for remitting these amounts to the government.

What are payroll tax expenses?

This is the tax that you pay from your own “pockets” to the Government. It’s still a payroll tax because the amount of this tax depends on the gross wages of your employees.