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payroll managment

payroll managment

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Published by bhartisuman

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Published by: bhartisuman on Apr 02, 2011
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07/20/2013

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CHAPTER-1INTRODUCTION
1.1 INTRODUCTION
Payrollmanagement system encompasses all the tasks involved in paying anorganization’s employees. It typically involves keeping track of hours worked andensuring that employees receive the appropriate amount of pay. It also includes calculatingtaxes and social security,as well as ensuring that they are properly withheld and processed. Depending on the company in question, a full range of other deductions may becalculated, withheld, and processed as part of payroll administration. Additionally, theprocessing of contractor payments may fall under the umbrella of payroll administration.The specific tasks involved in payroll administration tend to vary according to the needsof each unique company or organization. For example, some companies have workers thatreceive commissions in addition to salaries. In these companies, including commissions inemployee salaries is a part of payroll administration. For some companies, it also involvesassigning exempt or non-exempt status to workers, adding bonuses into paychecks,calculating overtime payments, and adhering to applicable employment laws.Handling payroll-related problems are part of payroll administration as well. If anemployee is paid an incorrect amount or a direct depositfails to go through, both things are payroll administration issues. Likewise tax filing and deduction errors are payrolladministration matters as well.Payroll administration can be very simple, involving the payment of just a handful of employees, or very complicated, involving payroll for thousands of employees andcontractors. In some, very small companies, payroll may be handled by the owner of the
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company or an employee. However, other companies may have many employees to payand keep track of necessitating a well planned, efficient payroll administration system.Some companies choose to handle payroll administration in-house, often creating aseparate department just for the handling of payroll. Often, such organizations purchasesoftware to streamline payroll-related tasks. Some companies even have special softwaredesigned for them, creating a payroll system that is tailored to their unique requirements.Many companies decide tooutsourcepayroll administration to other companies. Payrolladministration companies handle most, if not all, payroll-related tasks for the companiesthey serve. Some payroll administration companies also provide management and humanresource assistance as well. Many payroll administration companiestailor their services tomeet the needs of organizations of all sizes and types. Some even offer on-site help andpayroll consultations as well.Payroll is defined as a method of administrating employees’ salaries in the organizations.The process consists of calculation of salaries and tax deductions of the employees,administrating the retirement benefits and disbursements of salaries to employees. It canalso be called as an accounts activity which undertakes the salary administration of employees in the organization.Administrating the employees’ salaries is not an easytask, the HR and accounts department work together to calculate and disburse the salary tothe employees. Thus, payroll management can be further subdivided into two subprocesses, i.e. Payroll accounting and payroll administration.Payroll refers to theadministration of employees' salaries, wages, bonuses, net pay, and deductions. It consist of the employee ID, employee name, date of joining, daily attendance record, basic salary,allowances, overtime pay, bonus, commissions, incentives, pay for holidays, vacations andsickness, value of meals and lodging etc. There are some deductions such as PF, taxes, loaninstallments or advances taken by employee.
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PAYROLL IS ADMINISTERED ON MONTHLY BASIS AND ANNUALBASIS.
While administrating the monthly payroll basic salary, HRA, conveyance, and other specialallowances such mobile, etc are considered. There are some deductions.
 
Allowances, incentives, bonuses and reimbursements are based on organizational policies.Some organizations provided the allowances on a fixed rate say 10% or 12% of the basicsalary. Some organizations go for performance based incentives.
PAYROLL MANAGEMENT PROCESSES
Calculation of gross salaries and deductible amounts is a tedious task which involves risk.Some of the organizations use the traditional manual method of payroll processing andsome go for the advanced payroll processing software. An organization opts for any of thefollowing payroll processing methods available:a)
Manual System
:- Manual payroll system is the traditional payroll system whichinvolves
 
pen and ink, adding machine, spreadsheet, etc instead of computers, software
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