What are payments and deductions required for running a payroll?

Payments & Deductions

Let’s first understand what are the payments & deductions provided by the employer

Payments: Any amount that is paid to an employee falls under underpayments. They include:
  • Basic pay
  • Special Allowances
  • Children’s Education Allowances
  • HRA
  • Bonuses
  • Commissions/incentives
  • Overtime pay
  • Expenses
  • Leave Encasement
  • Gratuity
Deductions: Any amount which is deducted from an employee’s Gross pay falls under deductions. They include:

Now before running the payroll the employer should collect all their employee’s monthly attendance, leaves taken by the employees, Loss of pay, any deductions, advances or loans, expenses to be reimbursed, bonuses or commissions to be paid, and then finally run the payroll.

To collect and process the above data takes a lot of time and effort and is also time-consuming. However, to save time and reduce errors, if one can automate their payroll process by adopting digitized payroll software/application it would be a better choice.

Explorer

Traces

What are TRACES?

Traces Expanded abbreviation – TDS reconciliation analysis and correction enabling system It is a utility provided by the Income Tax Department for a Taxpayer and

Read article