What is Payroll Compliance
Payroll compliance refers to the set of regulations and laws that businesses must follow when processing and managing payroll for their employees. These regulations are established by government authorities at the local, state, and federal levels and are designed to ensure that employees are compensated fairly, and taxes and other deductions are handled correctly. Payroll compliance is crucial for maintaining legal and ethical business practices.Key aspects of payroll compliance include:
Minimum Wage Laws:
Ensuring that employees are paid at least the minimum wage set by applicable laws and regulations.Overtime Pay:
Compliance with laws governing overtime pay for eligible employees who work more than a certain number of hours in a week.Tax Withholding:
Accurate calculation and withholding of federal, state, and local income taxes from employees' paychecks.Social Security and Medicare Contributions:
Proper deduction and submission of Social Security and Medicare taxes as required by law.Employee Classification:
Ensuring that employees are correctly classified as either exempt or non-exempt for overtime purposes, and distinguishing between employees and independent contractors.Record-Keeping:
Maintaining accurate and detailed records related to employee wages, hours worked, and payroll transactions.Wage Garnishments:
Complying with legal requirements for wage garnishments, which are court-ordered deductions from an employee's wages to satisfy debts.Reporting and Filings:
Submitting required reports and filings to government agencies, such as quarterly and annual tax returns.Benefits and Deductions:
Managing employee benefits and deductions in accordance with legal requirements and company policies. Non-compliance with payroll regulations can result in financial penalties, legal consequences, and damage to an organization's reputation. Therefore, businesses must stay informed about changes in labor laws and tax regulations to ensure ongoing compliance with payroll requirements. Many organizations use payroll software and consult with experts to help manage and navigate the complexities of payroll compliance.Payroll Compliance
Adhering to statutory compliance is necessary for all companies, regardless of the size of the company to keep their businesses safe from the legal trouble. To minimize the risk associated with the noncompliance of statutory requirements, one should have a strong knowledge of statutory compliance
It is very challenging for employers to manage statutory compliance. Companies have to spend a significant amount of time in their payroll management to ensure that they are compliant with the legal regulations and avoid heavy penalties
Oam Strategic Management Payroll experts team will accurately calculate all statutory deductions and generates consolidated monthly reports and challans of remittances, to ensure that you have complete peace of mind as far as this requirement is concerned
Common Statutory requirements that Indian companies have to follow for their payroll management are:Provident Fund (PF)
Employee Provident Fund is a retirement benefit scheme that is available to all salaried employees. This fund is maintained by the Employees Provident Fund Organization of India (EPFO) and any company with over 20 employees is required by law to register with the EPFO.
EPF is calculated based on Basic+DA received in a particular month and the employee contribution is 12% on the earned Basic+DA. Employer will also need to contribute the same amount in EPF and EPS (Employee's Pension Scheme) accounts together
We help our customers with:- Register New employee and generate UAN
- Upload KYC
- Upload Monthly Contributions and Generate Challan
- Mark Exit employees
Employee State Insurance (ESI)
Employees State Insurance Act, 1948 is a social insurance scheme that would protect the interest of workers in contingencies such as sickness, maternity, temporary or permanent physical disablement, death due to employment injury resulting in loss of wages or earning capacity
Every employee whose gross salary is less than 21000, should be covered under ESI. Currently, the employee's contribution rate is 1.75% of the wages and employer's contribution rate is 4.75% of the wages paid/payable in respect of the employees in every month
We help our customers with:- Register New employee, dependents and create Temporary IP
- Update Nominee/Supose details
- Upload & Create Contributions and Generate Challan
- Mark Exit and out of coverage employees when employee resign from company
