Understanding Payroll Deductions: How HR and Finance Collaborate on Salary Processing

Hi Sukhdev,

Payroll is the salary processing system.

Payroll can be seen from two aspects: one from the HR side and the other from the commercial people's side. The HR personnel process the payroll by sending attendance details or, more precisely, LWP details, and other complete information that an employee is set to receive in a particular month.

After receiving these details, the commercial team begins entering them into the payroll software, commencing the salary processing.

While processing the salary for a specific month, we, the HR personnel, provide comprehensive LWP (Leave without Pay) details to the commercial department.

When calculating LWP, we prepare the attendance sheet with the weekly offs. Besides weekly offs, we also verify the number of days an employee is absent, how many of those days were for leave, cross-referencing with leave applications. If an employee has submitted an approved leave application and has the corresponding leave in their account, we mark them as on leave.

However, if an employee has not submitted a leave application or lacks sufficient leave balance, we consider them absent for that particular day and deduct their salary accordingly.

Likewise, if there is a provision for providing one day's extra salary for a specific day if the employee shows up, we calculate the additional day's salary for those employees present on that day.

I hope this clarifies the process for you.

Regards,

Amit Seth.

Dear Sir,

I recently joined my organization, and they have assigned me the responsibility for payroll and all salary-related issues. Could you please provide me with detailed information on deductions from salaries and their rates at different scales? Additionally, I would appreciate guidance on how to make payments to the government in accordance with the laws governing EPF, professional tax, ESI, TDS, etc.

Thank you,
Sukhadev Sathe

Sir,

I joined my organization recently, and they have made me responsible for payroll and all salary-related issues. Please help me by providing details of deductions from salary and their rates on different scales.

Additionally, could you give me details on how to make payments to the government as per the law for EPF, professional tax, ESI, TDS, etc.

Thank you.