Can anyone tell me: Is there any difference between Payroll management and Compensation management, or are they the same? I have read that there are some differences between them.
Also, what are the taxable components of salary for a white-collar and blue-collar employee, and up to what limit?
Regards,
Prashant
From India, Delhi
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10Also, what are the taxable components of salary for a white-collar and blue-collar employee, and up to what limit?
Regards,
Prashant
From India, Delhi
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Dear Colleagues,
I would like to lend my voice to the question/topic raised by Prashant.
Payroll Management can be defined as the act of updating employee payment schedules on a basis approved by management, considering all factors such as regular salary/wages, overtime spent, loan deductions, tax payable, deductions based on absenteeism, and the eventual disbursement of whatever is due to the employed populace.
Compensation Management, on the other hand, is the HR function that seeks to formulate and advise management on how to compensate employees. It carries out salary surveys, tries to benchmark using best practices in the industry/globally, and proposes 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 against Payroll Management that executes its job weekly, monthly, annually depending on the pay system put in place.
As for the taxable components, this would certainly vary from one tax regime/country to another. However, basics such as housing and transport are well-known taxable components, while most benefits/subsidies are usually tax-free, for example, medical, insurance, lunch, and 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
From Nigeria, Lagos
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I would like to lend my voice to the question/topic raised by Prashant.
Payroll Management can be defined as the act of updating employee payment schedules on a basis approved by management, considering all factors such as regular salary/wages, overtime spent, loan deductions, tax payable, deductions based on absenteeism, and the eventual disbursement of whatever is due to the employed populace.
Compensation Management, on the other hand, is the HR function that seeks to formulate and advise management on how to compensate employees. It carries out salary surveys, tries to benchmark using best practices in the industry/globally, and proposes 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 against Payroll Management that executes its job weekly, monthly, annually depending on the pay system put in place.
As for the taxable components, this would certainly vary from one tax regime/country to another. However, basics such as housing and transport are well-known taxable components, while most benefits/subsidies are usually tax-free, for example, medical, insurance, lunch, and 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
From Nigeria, Lagos
Acknowledge(0)Amend(0)
Compensation Management includes:
- Market salary survey
- Fitting salary package to a position
- Total salary analysis
- Determining salary package
- Determining the best mix within each position like base salary, bonus, benefits, incentives, etc.
- Analyzing the tax impact, etc.
Payroll Management:
- Salary/wage administration
- Salary/wage documentation
- Salary/wage recording
- Salary/wage deductions
- Salary/wage adjustments (where applicable)
- Meeting regulations compliance, etc.
Regards,
LEO LINGHAM
From India, Mumbai
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- Market salary survey
- Fitting salary package to a position
- Total salary analysis
- Determining salary package
- Determining the best mix within each position like base salary, bonus, benefits, incentives, etc.
- Analyzing the tax impact, etc.
Payroll Management:
- Salary/wage administration
- Salary/wage documentation
- Salary/wage recording
- Salary/wage deductions
- Salary/wage adjustments (where applicable)
- Meeting regulations compliance, etc.
Regards,
LEO LINGHAM
From India, Mumbai
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Basics of Compensation Management.pdf