A solid salary structure will make it easier to budget your salary. It can also help you retain your existing employees and make recruiting, hiring, and promoting easier.
No matter how small the organization, the payroll system is a vital employee-related system. The payroll system is a critical component of employee satisfaction. It helps to determine its image by accurately calculating Payroll and paying employees’ salaries on time.
Calculating salaries and making sure they are paid according to policy is complicated. It involves complex calculations like overtime calculations, tax deductions, deductions for leave, arrears calculations and other complicated calculations. For smaller businesses, manual payroll calculations can take up to four days. If the company is large, it might take longer. Payroll processing teams are often unhappy with the potential for incorrect payroll calculations and the long workdays required to complete the Payroll before the pay date.
Both HR and Payroll are closely linked. Even though payroll processing takes a lot of time, mistakes are still reported, leading to problems for HR like costly queries handling, penalties, and dissatisfied employees. Good online payroll services can help streamline your company’s salary/wage administration and avoid many of the challenges that come with payroll processing.
Indian Payroll Management is an ongoing process. Payroll Management activities are not marked as complete. Each month, the same tasks are presented to the screen. Every month, the same obstacles are encountered. Many organizations now use cloud-based payroll management software.
An employer pays salaries to the workers in exchange for their services. The process of Payroll computation can be exciting if not streamlined. While the payroll processing varies from company to company and depends on their work culture, the payment rudiments remain the same in India.
The success or failure of any organization is also determined by its employees. Managing employees and protecting their rights is essential to maintain its growth. The right HR management system and the right remuneration policies can be a powerful influencer in retaining the trust and skills necessary to improve the company’s reputation and profits. A well-defined salary structure will be essential for successful remuneration policies. Although salary is not the only factor employees consider essential, it is the most attractive and desirable aspect of an employee base. Poor attention to salary and payment will lead to dissatisfied workers, negatively impacting your company’s profits.
The Salary structure gives an overview of the exact details of the salary and will indicate the range of salary per grade an organization or company will pay. HR and Payroll allow you to create a well-organized, effective Salary Structure. It will ensure that your organization is competitive and has a balanced budget. These Salary structures aim to ensure internal consistency as well as external competitiveness. An employee with similar skills or positions can be treated the same way. You can create a salary structure that will allow you to pay equal wages for equal work.
Best Practices in a Payroll Management System
Integrates HR and Payroll systems. It has allowed hundreds of companies to implement Payroll. We also have some best practices we want to share with your company. These best practices will save your company money and align your payroll process.
-
Making use of Maker-Checker in payroll processing
The Payroll is created by the maker and approved by the checker. The mechanism requires multiple people to be involved at various stages of payroll processing. The “Maker” calculates the Payroll and authorizes the “Checker” to approve it before it is disbursed.
-
Transparency through salary slips, YTD values and other means:
Transparency in payroll calculations within a payroll system is a sign of credibility and acceptance. The salary slips should include all salary heads, including benefits, deductions, and loans, as a soft copy. The year-to-date values (YTD) allow employees to see their earnings and deductions in one place.
-
Pay-outs can be made by using salary structures in your payroll system.
A payroll system that uses salary structures allows easy administration and ensures that every job is appropriately compensated. The salary structures allow employees to understand their salary breakdown and plan their taxes clearly.
-
Divide payroll processing into groups
Suppose your organization is large and you have offices in multiple locations. In that case, it is a good practice to divide the salary processing into groups that can easily be managed by local HR SPOCs (Single Point of Contact). It will ensure that employees are aware of local statutory requirements. It allows you to set different pay-out frequencies for different employee groups.
-
Stage-wise payroll processing
Stage-wise, payroll processing allows you to track your payroll system as it progresses. There are several stages to payroll processing:
- Setting up a monthly sheet
- Calculating monthly pay
- Checking approval
- Finalizing Payroll and disbursing Payroll
-
Audit trail for any changes
Every time there is a change, audits should be performed. An audit can be done following a change in salary structure to identify any errors in payroll calculations. Errors can lead to employees being underpaid or overpaid if they aren’t caught quickly.
-
An automated payroll system allows integration of different activities
Integrate other systems into your payroll system. Payroll systems that integrate multiple business processes, such as time and attendance, human resources management (for employee dependent and address information), Leave Management, benefits and commission, variable payment system, tax reporting and investment declarations, offer more significant ROI (Return on Investment) than systems that calculate Payroll. Excel is often used to transfer data between systems. However, this can lead to errors.
-
Statutory reporting via the payroll system
Online payroll software that calculates taxes should be reliable and free you from all regulatory and legal responsibilities as an employer. It should provide all the required reports and remind you to fill them with the appropriate departments. It can often result in costly litigation or substantial fines.
Conclusion
The contract type, job position, work experience, and employee performance need to be considered when creating a Salary Structure. The Salary structure is the sum of the various salary categories, such as gross salary, basic salary, allowances and net salary.
