Understanding Payroll Systems: What Should I Focus on for My Upcoming Interview?

Could anybody help me with the complete system of Payroll in organizations? What are the things that come under payroll? What should one concentrate on more while calculating an employee's payroll? And many more. Please suggest. This could help me in my upcoming interview.

Hi Shrawani,

"Could anybody help me with the complete system of Payroll in organizations?"

Yes, sure, why not!

"What are the things that come under payroll?"

Payroll is divided into two parts:

Monthly payroll which includes the following:
- Basic salary
- HRA - 50% of basic for four major metros & 40% for other metros
- Conveyance - Rs 800/p.m. If excess, it would be added to taxable salary
- Special allowance

Annual payroll includes:
- Medical Reimbursement - Rs 15,000/- max p.a.
- LTA
- Meal Vouchers - Rs 50 per working day paid through Sodexo/Accor vouchers

"What should be given more focus on while calculating employee payroll?"

In payroll on a monthly basis, the monthly breakup is paid and is subject to the following deductions:
Monthly payroll deductions include:
- Provident Fund - 12% of the basic
- Professional Tax - Rs 200 (varies from state to state)
- Income Tax
- Other deductions like loans or advances, etc.

Net take-home pay: Rs ....

If you have any queries, please revert. My colleagues would join me to help you. I would also suggest doing a quick search on the topic, then putting up a query. Best wishes for your interviews!

Cheers,
Rajat

Hi,

I am also working on it. Can anyone tell me what amount should be charged for undertaking the payroll process of a company? Through the website, I came to know that they charge 4% of the employee's pre-tax salary, but upon calculating, it sounds very alarming. The company may do the process themselves at that cost and may not outsource it.

Can you guys suggest a feasible amount or the market price?

Regards,
Veena.M

Hi,

I would like to know the scope of HR in payroll. Where does our role start and end? I am the sole HR in the organization and I am a 2005 graduate. Currently, the only area I am handling is leave and late calculation. The calculated document is submitted to the accountants for the calculation of salary. We have an admin executive who deals with the bank transactions.

Thanks and Regards,
Asha

Hi,

I am sending the pay structure per month:

Earnings

1. Basic - 50% of Gross
2. HRA - 40% of Basic *If Gross <= 3000 then 30%*
3. C.A. - 40% of Basic
4. Medical - Basic/12
5. Educational - Salary Range - Amount
- Upto Gross Salary 3000/- to 15000/- - 200/-
- Upto Gross Salary 15000/- to 18000/- - 500/-
- Upto Gross Salary 18000/- to 30000/- - 1000/-
- Upto Gross Salary 30000/- - 1500/-
6. S.P.A. - Basic + HRA + C.A. + Medical + Education - Gross

Deductions

1. P.F. - 12% on Basic
2. E.S.I. - 1.75% on Gross, If Gross <= 7500
3. P.Tax -
- Salary up to 2001 - Rs. 16.00
- Salary up to 3001 - Rs. 25.00
- Salary up to 4001 - Rs. 35.00
- Salary up to 5001 - Rs. 45.00
- Salary up to 6001 - Rs. 60.00
- Salary up to 10001 - Rs. 80.00
- Salary up to 15001 - Rs. 100.00
- Salary up to 20001 - Rs. 150.00
- Salary above 20001 - Rs. 200.00

Regards,
Y. Venumadhava Reddy

Hi,

Regarding Gross Salary & CTC, CTC consists of a simple formula, i.e., A+B. 'A' part is 12*(Basic+HRA+Conveyance+Education Allowance), and 'B' part is Annual - P.F + LTA + Bonus + Medical reimbursement + Books & Periodicals.

Gross salary is always taxable. Just remember, if you are thinking from a company's perspective, always try to keep the basic salary as low as possible. This will help the company reduce its PF share. Additionally, removing a person from ESIC also provides numerous cost benefits to the company.

Dear all,

The percentage-wise is fine, but what's next? How to put PF into the PF account? When to put it? Where to put it? Who is the authority? The same applies in the case of other payroll factors. What is the actual processing?

Amol

Hi,

I would like to know about HR Administration. What are the roles and responsibilities of the HR executive in Administration? Also, I would like to know about client and vendor management and what is meant by compliance. Additionally, what is meant by drafting and collection? Can anyone help me with these topics?

Thanks and Regards,
Dadu.