When you choose your Payroll software, it is important to ensure that it helps you meet all the compliance requirements. It will help you to learn about the statutory compliance requirements to minimise the risks. So what are the basic points to know when addressing compliance requirements?
Provident Fund Inclusion
It is mandatory to pay Provident Fund to your employees as part of their remuneration if you have a specific number of people working for your organisation. You should ensure that your payroll system calculates and disburses accurate amount to comply with the EPFO rules and regulations.
Tax & Deductions
TDS deductions and other taxes are important concerns for HR professionals. It is important that these deductions are made when computing the salary. Depending on your state, there may be certain professional tax deduction as well.
The right software can identify the qualifying employees and make the deductions, automatically. You don’t want to be penalised for failing to comply with these regulations.
Your payroll system should also include gratuity as part of the compensation paid to the employees. Gratuity is required to be paid by the organisation if it has a certain minimum number of employees. In fact, all types of organisations are required to pay it including:
- Commercial businesses
- Educational institutions
- Medical institutions
- Non-Governmental Organisations
ESI & EDLI
Depending on employee salary, the software should also compute and contribute to their ESI fund. Employers are also required to contribute Employees’ Deposit Linked Insurance Scheme (EDLI) to their employees as a certain percentage of the total wage.
So depending on the size of your organisation, it is important to have a Payroll software that complies with the applicable regulatory requirements. It is important that you lay out these requirements before looking for the right software that can be configured accordingly.