Dear Colleagues,
I would like to lend my voice to the question/topic raised by Prashant.
Payroll Management-this can be defined as the act of updating employee payment schedule on a basis approved by Management, considering all factors such as, regular salary/wages, overtime spent, loan/s deductions, tax payable, deductions based on absenteeism and the eventual disbursement of whatever is due to the employed populace.
Compensation Management-while on the other hand Compensation Management is that HR function that seeks to formulate and advice Management on how to Compensate Employees-carries out salary surveys, tries to bench mark using best prcatices in the industry/globally.
It also propose Compensation Systems that could help Retain Employees considering their Welfare, Pension, Gratuity and all other Benefits.
Hence Compensation Management is more of a long term HR unit/function as agaisnt Payroll Management that executes its job weekly, monthly, annually depending on the pay system put in place.
Then as for the Taxable Components- this would certainly vary from one tax regime/country to another, but-Basic, Housing, Transport-are well known taxable components-while on the other hand most Benefits/ Subsidies are usually tax free-eg. Medical, Insurance, Lunch,Drivers'
Above all it is a known fact that an Employer must not deduct more than 1/3 (one third) of an employee's package.
Thanks.
Afolabi Ajayi