Let’s first understand what are the payments & deductions provided by the employer
- Basic pay
- Special Allowances
- Children’s Education Allowances
- Overtime pay
- Leave Encasement
- Provident Fund
- Professional Tax
- Employee state Insurance (ESI)
- TDS deduction
- Loss of pay
- Health Insurance
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.