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sridhar27
I agree with Dave that Payroll function is not necessarily a HR function.
Salary structure of an employee is also his/her tax tool. Some Benefits, Allowances and Re-imbursements (Fringe Benefits) are not taxable as per income tax rules which can be better interpreted by the finance department or a payroll expert. Employees will try to reduce his/her tax burden and increase savings/take home salary. So from tax perspective, which is the main concern for employee, finance department is in a better position to help/advice the employee.
Secondly, as already mentioned in this thread, from payroll audit perspective finance people are more competent in record keeping and in handling auditors/audit quiries.
So, I feel, ideal situation would be HR giving attendance inputs and finance processing the payroll.

From India, Bangalore
Rajesh Juvva
Hello Goverdhan ji.
You have given an excellent and clear cut answer sir. We are very glad and pleasure to have you in this community to help fresher like me. Thank you sir and this would help me in my studies

From India, Hyderabad
Raghunath Sabat
20

Dear Jennifer,

Payroll refers to the process of calculating and distributing employee salaries, wages, bonuses, and deductions within an organization. It involves tasks such as tracking attendance, calculating working hours, applying tax deductions, accounting for benefits, and ensuring accurate and timely payment to employees.

While payroll is primarily a financial function, it is closely connected to HR due to the following reasons:

Employee Compensation: Payroll is directly linked to employee compensation, which is a fundamental aspect of the employer-employee relationship. HR plays a crucial role in managing and administering compensation and benefits programs, ensuring fairness, compliance with labor laws, and alignment with organizational policies.

Employee Data Management: HR departments maintain comprehensive employee data, including personal information, employment contracts, tax-related details, and benefits enrollment. This information is essential for accurate payroll processing, as it determines factors such as salary, deductions, and tax withholding.

Compliance and Regulations: Payroll activities require adherence to numerous legal and regulatory requirements, including tax laws, labor laws, and statutory deductions. HR professionals are responsible for staying updated on these regulations, ensuring compliance, and avoiding any legal issues related to employee compensation.

Employee Engagement and Satisfaction: Timely and accurate payroll processing is crucial for maintaining employee trust, satisfaction, and engagement. HR departments work closely with employees, addressing payroll-related concerns, resolving discrepancies, and providing support during salary revisions or benefit changes.

While the finance department typically handles the technical aspects of payroll processing, HR's involvement ensures that employee compensation is aligned with organizational policies, legal requirements, and employee well-being. Collaboration between HR and finance departments is essential to ensure accurate payroll management and maintain a harmonious work environment.

I hope this explanation clarifies the connection between payroll and HR functions. Feel free to ask further questions if you need more information.

From India, Mumbai
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