PAYROLL

PAYROLL is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. In accounting, payroll refers to the amount paid to employees for services they provided during a certain period of time.
PAYROLL

INTRODUCTION
From an accounting point of view, payroll is crucial because payroll and payroll taxes considerably affect the net income of most companies and they are subject to laws and regulations From an ethics in business viewpoint, payroll is a critical department as employees are responsive to payroll errors and irregularities: good employee morale requires payroll to be paid timely and accurately.

PAYROLL

GOAL
To ensure that all employees are paid accurately and timely with the correct withholdings and deductions To ensure the withholdings and deductions are remitted in a timely manner. This includes salary payments, tax withholdings, and deductions from a paycheck.

PAYROLL

PAYSLIP OR PAYCHECK
PAYCHECK is traditionally a paper document (a cheque) issued by an employer to pay an employee for services rendered. A pay stub, payslip, pay advice, or sometimes paycheck stub, is a document an employee receives either as a notice that the direct deposit transaction has gone through, or is attached to their paycheck.

PAYROLL

PAYROLL FREQUENCIES
Companies typically generate their payrolls on regular intervals, for the benefit of regular income to their employees. Common payroll frequencies include: daily, weekly, bi-weekly (once every two weeks), semi-monthly (twice per month), and to somewhat of a lesser extent, monthly. Less common payroll frequencies include: 4-weekly (13 times per year), bi-monthly (once every two months), quarterly (once every 13 weeks), semiannually (twice per year), and annually.

PAYROLL

SALARY
Salary is the fixed regular payment, usually monthly, an employee receives for performing the job for a particularly pay period. Salary can be calculated on hourly , daily weekly or yearly basis. It can also include overtime pay. Bonuses and commissions. Salary can be termed as wages, pay or earnings or remmuneration.

PAYROLL

SALARIES IN INDIA
In India, salaries are generally paid on the last working day of the month (Government, Public sector departments, Multinational organizations as well as majority of other private sector companies). Several other companies pay after the month is over, but generally by the 5th of every month. However there are companies pay after this also. For instance, for companies under 'Godrej Group', salary is paid on 9th of month for the preceding month. In case 9th is a holiday, it is paid on 10th, and in case both 9th and 10th are holiday, it is paid on 8th.

PAYROLL

Consideration Before PAYING

Additional payments, such overtime , bonus and annual wage supplements. Any sum paid to the employees for reimbursement of special expenses incurred by him/her in the course of payment. Productivity incentive payments. Allowances that are mentioned in the employment contract.

PAYROLL

GROSS PAY
Gross Pay is the total amount an employee has earned ,
including Inome tax and other deductions.

Gross pay for salaried employees is calculated =

Total annual pay for that employee /No. Of pay periods in that year An employee has to pay a fixed monthly percentage as ESI contribution and other health policies from the gross pay .
PAYROLL

GROSS PAY REPORT A printed report shows the staff name and number and hours worked, overtime , holidays, sick pay , allowances and bonuses
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 Gross Pay for Hourly Employees: the

gross pay of hourly employees is the product of the hours worked and the rate per hour. It is the amount paid to an employee every month on a particular day.

Calculations of Gross Pay for Hourly Employees :

The gross pay for hourly employees is calculated by multiplying the number of hours employee has worked in the pay period multiplied by the hourly pay rate .Overtime pay is also included in the gross pay calculation.

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PAYROLL

NET PAY
Net pay is the remaining amount after deductions from the gross salary, where net means ultimate. Example deductions: income taxes, trade union dues, authorized deduction for a retirement fund. Net pay is the amount left over after deductions from the gross salary. Net pay or salary is the take home salary AT LAST, they are the PROFITS that a we get.

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PAYROLL

OVERTIME
Overtime is the amount of time someone works beyond normal working hours. The normal working hrs. are laid down in the factories act. Any worker working for more than 9 hours per day or more than 48 hrs per week is entitled to overtime payment. It also provides payment of overtime wages at double the normal rates of wages.

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PROS & CONS

PROS:

a more flexible workforce increased earning for employees the ability to carry out repair and maintenance which has to be done outside normal working hours CONS: fatigue, which may increase absence levels and lead to unsafe working practices. It leads to excessive labour cost . It puts an extra stain on plant and machinery.

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PAYROLL

CONTROL OF OVERTIME
In order to keep overtime premium to mini mum, proper Control must be exercised by the following steps: All overtime work should be daily authorized by Works Manager . Overtime cost should be separately recorded for each department for proper planning in future.

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PAYROLL

BONUS
The word Bonus refers to extra pay due to good performance.

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PAYROLL

COMMISION
It is defined as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold. This is a way for firms to solve the principal-agent problem, by attempting to realign employees' interests with those of the firm.

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PAYROLL

BRIEF INTO COMMISION

Industries where commission is commonly paid : car sales, property sales, insurance broking and many other sales jobs. A side effect of commissions is: they can result to salespeople resorting to dishonest and fraudulent business practices in order to increase their sales. Offering compensation in the form of commission alone is known as straight commission. Compensation may also take the form of commission plus a fixed salary.
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PAYROLL

COMMISION STRUCTURE
The amount of commission can be structured for employees according to the type of products they sell. The type of commission is decided on an employees performance record, product type or specific products. Following are the types of commission that an organization can use , depending upon the nature of business: 1.Gross Percentage 2.Amount Percentage

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