Payroll Management Service

Neotax Payroll ensures 100% statutory compliance and zero stress

What is Payroll Processing?

Payroll processing encompasses the process of computing, preparing, and distributing employee remuneration, including salaries, wages, incentives, and other types of payment, as well as relevant taxes, deductions, and contributions. It is a crucial element of a company’s financial management, guaranteeing that employees receive accurate compensation for their work.

Generally, payroll processing entails tasks such as verifying and collecting employee attendance and timesheet records, computing gross pay, implementing taxes and deductions, and disbursing payments through direct deposit or checks. Furthermore, payroll administrators must ensure adherence to applicable laws and regulations at the local, state, and federal levels governing payroll, including tax codes and labor laws.

How can you calculate payroll in India?

Calculating payroll in India involves several steps. Here’s a basic guide on how to do it:

Collect Attendance Data

Collect attendance data from your employees, either through manual attendance registers or biometric attendance monitoring systems.

Calculate Basic Salary

Calculate the basic salary of each employee based on their employment contract or offer letter

Determine Gross Salary

Add any additional components such as allowances, bonuses, or overtime pay to the basic salary to calculate the gross salary.

Deduct Statutory Deductions

Calculate and deduct statutory deductions such as Provident Fund (PF), Employee State Insurance (ESI), and Professional Tax (PT) as applicable.

Deduct Income Tax

Calculate and deduct income tax based on the employee’s income tax slab, as per the Income Tax Act.

Compute Net Salary

Subtract the statutory deductions and income tax from the gross salary to arrive at the net salary.

Process Payments

After computing the net salary, process the payments through direct deposit or issue checks to the employees.