Showing posts with label statutory compliance in HR. Show all posts
Showing posts with label statutory compliance in HR. Show all posts
Importance of statutory compliance in HR for an organization

Importance of statutory compliance in HR for an organization

 It is known that the scope of statutory compliance in an organization is limited to deducting taxes from employees' salary and paying it to the government. While it is not the only thing it does, it also ensures that the organization provides adequate benefits to employees as well.


firstly we learn about tax compliance and its importance in business. This needs to be further split into four parts: Withholding, Contributing, Remittance & Reporting.


Withholding: Every employer should follow certain tax rules as mandated by the respective agencies of the government in India, employee salaries are deducted towards Income tax, Provident fund, ESI, Professional Tax, and Labour Welfare Fund.


Contributing: Those above-mentioned deductions are made from the employees for their welfare. Each of these compliances is again governed by a set of rules and formulas.


Remittance:  Once deductions are done from the employees for the month, the employer has to make contributions and arrangements to remit them to the respective departments of the government. There are specific timelines & formats by when they need to be remitted and  Most of the remittances can now be done online through the banking system. 


Reporting: After deductions are made from the employees and remitted to the respective department in government, it is time for filling  ‘Returns’. It is a detailed report submitted by an organization to the respective government departments accompanying the remittances. It contains information on income paid to its employees and the taxes deducted.  Therefore the report should match the remittance made. Again, the respective returns are to be submitted as per specified timelines and formats.

Assessments & Internal Audits:

Authorized inspectors or enforcement officers of government departments are required to audit the remittances and returns for each completed year in order to check for any violations.    

Why WIN HRM Payroll?

Payroll and Statutory compliance in hr is a specialized subject and many prefer it to be managed by professionals due to constant changes in rules and also keeping in mind the adverse impacts of non-compliance. winhrmpayroll software helps you to manage the entire process seamlessly. our hr software support the computation of the right taxes, preparation of accurate reports/challans and link the system to government portals for remittances and filing of returns as well.

ESI Calculation |How to calculate esi calculation on salary in india?

ESI Calculation |How to calculate esi calculation on salary in india?

 What is ESI?

ESI is defined as Employees state insurance (ESI) is a beneficial scheme for employees in India during their health-related problems. Employees' monthly contribution is deducted from employee and employer accounts as ESI Contribution.

As per ESIC rules, ESI deduction is applicable for employees at organizations with the strength of more than 10 persons and it is applicable for full-time employees and not for contract employees.

ESI Contribution is a type of social security for state employees, Deductions and calculations depend on the states of India.

How is esi calculation on salary is done?

Major parameters are 

1. Gross pay

2. DA(Dearness allowance)

3. Employment state

4. City compensatory allowance

ESI contribution is from both employee and employer as employee's contribution is 0.75 % of the gross salary whereas the employer's contribution is 3.25% of the gross salary of the employee.

A sophisticated HRMS solution can make ESI calculation and compliance management easier for the HR department and payroll department.


Advantages of statutory compliances

statutory compliances define adhere  rules and regulations that an organization follows when dealing
with its employees

1. It ensures that the employees are paid based on the work they have done.

2. It ensures that the employees are not working for long hours or inhuman conditions.

3. It protects organizations from unreasonable wage or benefit demands from employee unions

4. It prevents organizations from legal troubles.

5.TDS Deductions: Employees having reasonable pay scale will have to lose a sum of money to TDS Deductions made by the employers of the company, Education, travel leave, medical allowance impacts TDS Deductions

6.wage system: Statutory compliance in HR benefits where there are minimum wages, This system helps in maintaining fixed and standard incomes for skilled and unskilled labours.

7.Provident fund: pf is the money saved for the workers to ensure that their basic needs are taken care of after they retire or not able to work.

8.Bonus act: Bonus is given to the employees for their performance over the period of time, This motivates employees to work with more efficiency for the betterment of the organization.

PF calculation - esi calculation on salary -statutory compliance in HR

Features of PF calculation software :

profession Tax
1.Profession TaxProfessional Tax is collected by the employers from the monthly salaries of the employees and penalties are charged if there is a failure in collecting or failing to pay professional taxes. Professional Tax amount varies from state to state; hence it set state wise in our Statutory Compliance Management Systems.


PF calculation - esi calculation on salary -statutory compliance in HR

PF calculation - esi calculation on salary -statutory compliance in HR

Features of pf calculation :

Employee state insuranceESI fund, maintained by ESIC is a social security scheme that is applicable to employees earning Rs 21,000 or less per month to provide cash and medical benefits to them and their families. ESI is calculated at 4.75% from the employer side and 1.75% from the employee’s side. These amounts will be calculated on monthly gross salary and a limit is a setup. If the gross amount is less than the setup limit amount then those employees will be eligible for ESI. The cumulative contribution from the employer and employee will be deducted from the CTC every month. To ensure the hassle-free operation of Statutory Compliances for PF Deduction and ESI Fund a robust payroll service is much required.

PF Calculation - esi calculation on salary - statutory compliance in HR

Features of pf calculation software :

Statutory compliance 


1.Provident FundProvident Fund or PF is a compulsory contributory fund for the future of employees. It works as a corpus fund generated through regular and monthly contributions made by an employee and employer. A minimum of 12% is calculated from the basic component of the employee’s salary and contributed as PF is deducted from the CTC. The cumulative contribution of the employer and employee will be added to the PF account of the employee, which can be en-cashed for future purposes. Companies will have to stay EPFO complaints once they have 20 or more employees.