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Payroll Services in India

ABPN's payroll processing services helps businesses outsource time-consuming payroll processes for operational efficiency, accuracy, timelines and compliance.

Simple, Scalable & Powerful Online Payroll Services, Retrospective pay calculation, TDS calculation, Pay slip generation, Time and Money Saving

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Payroll & Regulatory

What is a payroll?

A payroll is a list of employees working in a company that get paid at the end of the month or after a fixed period of time.

In other words, a payroll is the money owed by employees from their employer.

Why is payroll important?

A company functions due to its employees which work for a salary.

Payroll is their reward for work without which an employee may not have any motivation to work for the company.

It is hence essential that their salary is given to them on time. This is where payroll comes into picture.

Payroll laws and regulations

The laws that govern payroll are extensive. In addition to the various state and local regulations, some of the federal legislation that employers should be aware of includes:

  • Fair Labor Standards Act (FLSA) - The FLSA sets the national minimum wage and overtime rates, as well as payroll recordkeeping requirements and child labor laws.
  • Federal Insurance Contributions Acts (FICA) – FICA is a payroll tax that funds Social Security and Medicare.
  • Federal Unemployment Tax Act (FUTA) – Another type of payroll tax, FUTA, offers temporary income assistance for workers who have lost their job through no fault of their own.
  • Equal Pay Act (EPA) – Designed to prevent wage discrimination based on sex, the EPA requires employers to provide equal pay to men and women who perform similar jobs in the same workplace.
  • Davis-Bacon Act – The Davis-Bacon Act requires businesses engaged in public works projects to compensate laborers and mechanics with prevailing wages.

Why is it important to have payroll services handled by professionals?

Payroll management is a complicated process.

Calculating the salary of a single employee involves a lot of variables like gross salary, incentives, concessions, deductions, taxes and calculation of salary to be deducted for absence, uninformed leaves etc.

This is accompanied with legal compliances and additions or deductions such as EPF, TDS, ESI etc. that must be made according to current laws of taxation.

This definitely is a lot of work and there are high chances for errors if payroll is computed by an inexperienced or novice staff.

Mistakes made in calculation of payroll and non adherence to statutory laws can lead to levy of fines. This can also threaten the integrity of the Business if Tax officers get notified of the errors, calling for unwanted audits or the Business being terminated.

Payroll outsourcing company has many unique advantages as mentioned below

  • Time and Money Saving
  • Saving penalties for non-compliance
  • Process Analytics
  • Process Capabilities
  • Check processing
  • Latest Technology used in the system
  • Direct Deposit of the pays
  • Lower Risk Potential

Understanding the Basics: Payroll And Regulatory FAQs

  • Deductions: Wages withheld from an employee's earnings for the purpose of paying taxes, benefits and other mandatory items (e.g., garnishments) or voluntary contributions (e.g., charitable donations)
  • Gross pay: Total pay before taxes and deductions
  • Net pay: Take-home pay after taxes and deductions are subtracted from earnings
  • Compensation: All monetary and non-monetary payments, including the value of benefits, received by an employee
  • Pay stub: A summary document that demonstrates the factors – number of hours worked, the rates paid for those hours, deductions for taxes and benefits, etc. – that were used to calculate an employee’s pay for a designated period of time

The difference between regular, overtime and holiday pay is as follows:

  • Regular pay – A non-exempt employee’s regular rate of pay must not be less than the highest federal minimum wage, state minimum wage or local minimum wage in effect when work is performed.
  • Overtime pay – As defined by the FLSA, overtime pay is 1.5 times the employee’s regular rate of pay for each hour worked over 40 in a workweek. States may have their own overtime standards, which employers must follow.
  • Holiday pay – Although not a federal requirement, some employers will offer their employees paid time off for holidays or pay them at higher rates for time worked on a holiday.

Payroll services streamline your payroll processing. They reduce the stress on the person in a company responsible for payroll management and eliminate redundant busywork that manual payroll calculations may cause. For example, without a payroll service company, an employee may have to track their hours worked and send them to a manager. The manager then manually inputs the hours into the computer and calculates the employee's paycheck. With payroll services, the employee would clock in and out every day, and the service would automatically track their hours to calculate their pay.

Payroll services can be expensive, but they are often a good investment for your business. The cost of payroll services varies. Here are some factors that affect how much you pay for payroll services:

  • Services you require

  • Number of employees in the company

  • Number of pay periods per year

If your company hires a payroll service for multiple services, the cost will likely increase. For example, services may cost more if you add third-party benefit integration to your basic payroll processing. Also, some companies charge you for online and phone support services.