I am Ruban, pursuing M.S.W (H.R) at Mar Gregorios College. I have prepared a payroll process based on my knowledge. I am seeking your suggestions and corrections so that I can improve myself. I am eagerly awaiting your valuable comments.
Thank you.
Regards
From India, Madras
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3Thank you.
Regards
From India, Madras
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Feedback on Payroll Process
Hi, this is Karra Sarma, working as Senior Officer - HR. Your prepared payroll statement has errors in HRA and Travel Allowance calculations. Basically, HRA should be 40%/50% of the basic amount depending on whether it is a non-metro/metro city, following IT exemption rules. Travel allowance should be ₹800/₹1650 for normal health/physically handicapped individuals according to IT exemption rules.
We should not show PF & ESI as earning columns. According to regulations, PF deduction should be 12% of Basic+DA/Gross amount and ESI should be 1.75% of Gross Salary. Employer contributions for PF & ESI should not be deducted from the employee's salary, as this can lead to government scrutiny for incorrect practices.
Employer contributions should be made solely by the employer. The Basic + DA amount should be mentioned in accordance with the Minimum Wages applicability as per Government Gazette.
Please review my payroll statement and feel free to call me or email me for further clarification.
Regards,
Sarma
[Phone Number Removed For Privacy Reasons]
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From India, Hyderabad
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Hi, this is Karra Sarma, working as Senior Officer - HR. Your prepared payroll statement has errors in HRA and Travel Allowance calculations. Basically, HRA should be 40%/50% of the basic amount depending on whether it is a non-metro/metro city, following IT exemption rules. Travel allowance should be ₹800/₹1650 for normal health/physically handicapped individuals according to IT exemption rules.
We should not show PF & ESI as earning columns. According to regulations, PF deduction should be 12% of Basic+DA/Gross amount and ESI should be 1.75% of Gross Salary. Employer contributions for PF & ESI should not be deducted from the employee's salary, as this can lead to government scrutiny for incorrect practices.
Employer contributions should be made solely by the employer. The Basic + DA amount should be mentioned in accordance with the Minimum Wages applicability as per Government Gazette.
Please review my payroll statement and feel free to call me or email me for further clarification.
Regards,
Sarma
[Phone Number Removed For Privacy Reasons]
[Email Removed For Privacy Reasons]
From India, Hyderabad
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Hi There is no universal format for salary structure. However, earnings should be in LHS & deductions in RHS.
From India, Pune
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From India, Pune
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Dear ruban, Seen your salary sheet and comments given by sharma is appreciated. Also would like to add EPs8.33% MAX up to Rs.541/- only rest of amount goes to PF which pls update. Regards, ASK
From India, Madras
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From India, Madras
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Dear Sarma, wat about ESI & EPF cieling??? EPF it is fine if ur org allows contribution more than 6500 but in ur pay sheet, there is no cieling for ESI. pl check
From India, Hyderabad
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From India, Hyderabad
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Hi Ruban, Attached is a Payroll format for your understanding...... please review and if you need anything to insert further, please revert. Thanks Taru
From India, New Delhi
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From India, New Delhi
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Please change the PF card No. into PF Account No. Calculations and other details are okay. Please start with Basic Pay. HRA can be a lump sum or up to 40 to 50% of the basic. Not everyone will be traveling, so travel allowance is not required. Instead, you can make it a Conveyance Allowance.
In totality, it seems to be okay. All the best, dear.
From India, Kumbakonam
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In totality, it seems to be okay. All the best, dear.
From India, Kumbakonam
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Dear Mr.Ruban I have gone thru the xls file and I suggest HRA can be worked out at 50% of basic instead of 25% so as to avoid taxation on HRA.
From India, Madras
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From India, Madras
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Hello seniors, as I am studying, I prepared it. But I don't know the split-ups. Can anyone help me out with the split-up? I am not familiar with taxes. Could you teach me so that it will be helpful for me? Another question I have is about attendance. How should we take it, as 30, 31, or else 30.5? These are the doubts I have. Could you please clear them for me? Thank you very much for your suggestions and corrections, seniors.
Thanks and regards,
Ruban
From India, Madras
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Thanks and regards,
Ruban
From India, Madras
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hello seniors : Can any one help me out in salary split ups, tax and attendance ......... Seniors help me out
From India, Madras
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From India, Madras
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Dear Sarma,
What about the ESI & EPF ceiling? EPF is fine if your organization allows contributions more than ₹6,500, but in your paysheet, there is no ceiling for ESI. Please check.
Thanks for your communication. As per your advice, I have revised the format. ESI has a ceiling of ₹15,000. PF does not have a ceiling due to the act, with a wage limit of ₹6,500 for PF A/c No 10, 21, 22 purposes only. For remaining A/c No 1 & 2, it is the whole basic. If any employee is not willing to pay the PF amount, whether they are earning above ₹6,500, they need to provide a letter stating they are not willing to contribute to the PF. In the CTC Format and Salary sheet, it should be marked as Zero.
Simple.
I await your response.
Regards,
Sarma
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[Email Removed For Privacy Reasons]
From India, Hyderabad
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What about the ESI & EPF ceiling? EPF is fine if your organization allows contributions more than ₹6,500, but in your paysheet, there is no ceiling for ESI. Please check.
Thanks for your communication. As per your advice, I have revised the format. ESI has a ceiling of ₹15,000. PF does not have a ceiling due to the act, with a wage limit of ₹6,500 for PF A/c No 10, 21, 22 purposes only. For remaining A/c No 1 & 2, it is the whole basic. If any employee is not willing to pay the PF amount, whether they are earning above ₹6,500, they need to provide a letter stating they are not willing to contribute to the PF. In the CTC Format and Salary sheet, it should be marked as Zero.
Simple.
I await your response.
Regards,
Sarma
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[Email Removed For Privacy Reasons]
From India, Hyderabad
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Hi Ruban,
Understanding Attendance and Income Tax Deductions
Attendance is counted as the number of worked days plus leave with pay (SL/CL/PL/ML/Special Leave) minus leave without pay. Income tax deductions are normally handled by tax professionals. Every company has separate employees who are engaged and belong to the Chart of Accounts, Finance, or the senior-most HR person in the Compensation & Benefits division. It's a wide subject. If you want, please search on the Cite HR pages.
After becoming well-versed in the CTC format and salary statement preparation, only then can you understand the income tax deductions part.
Regards,
[Email Removed For Privacy Reasons]
[Phone Number Removed For Privacy Reasons]
From India, Hyderabad
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Understanding Attendance and Income Tax Deductions
Attendance is counted as the number of worked days plus leave with pay (SL/CL/PL/ML/Special Leave) minus leave without pay. Income tax deductions are normally handled by tax professionals. Every company has separate employees who are engaged and belong to the Chart of Accounts, Finance, or the senior-most HR person in the Compensation & Benefits division. It's a wide subject. If you want, please search on the Cite HR pages.
After becoming well-versed in the CTC format and salary statement preparation, only then can you understand the income tax deductions part.
Regards,
[Email Removed For Privacy Reasons]
[Phone Number Removed For Privacy Reasons]
From India, Hyderabad
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