Traditionally businesses, especially smaller ones, carry out their payroll process in-house and manually. A manual payroll system typically requires a great deal of paperwork and time consuming. A manual process also creates an administrative burden for your HR staff.
Errors in data entry, can create payment issues. This can be resolved by using an integrated software, which can be far more cost-effective than hiring additional staff to handle a growing manual process.
Employees are also given tax friendly benefits, which is delighting to them. Thus new trends in payroll proves advantageous to both the organization and the employee. Some of the new trends in payroll are as follows:
1. Flexi pay:
Flexi pay is a benefit plan, a basket of tax friendly components mostly picked and chosen by employees. The amount under the Flexible benefits basket would be part of the CTC. Some of the flexible components are House rent allowance, fuel allowance, Leave travel and Medical allowance, Mobile reimbursement, etc.
2. Tax saving scheme:
It’s a known fact that employees can save tax through various investments like insurance, mutual funds, etc. but there are other tax saving schemes which are more attractive and will help saving more tax to be paid. They are Meal vouchers, gift cards, etc. Traditional paper coupons have been reformed to paperless coupons to save time and cost in computation and usage.
3. Payroll software:
Laborious error prone manual payroll management has been a costly affair for organizations today. A classic Time and attendance solution would help in computing paid days, thus assisting payroll software for a swift and error free automatic salary computation without manual intervention.
Outsourcing payroll management helps HR team to concentrate on more important matters, such as increasing productivity and employee engagement. Payroll outsourcing vendors are experts in payroll management and compliances. It is a cost-effective move, and one that can free up valuable time and resources within your organization.
5. Performance linked pay:
The practice of linking pay to performance has been around for a while. However, what’s new is that the percentage of pay that is linked to performance and the way in which the same is structured around different components of performance is new.
6. Payroll compliance:
Accurate and timely management of compliance practices are required for every business and every payroll professional. This is especially crucial for businesses to avoid costly complaints and government investigations and penalties. Example: Incorporating the new ESIC rule in the employees CTC. Fortunately, an outsourced payroll solution can mitigate this risk along with a reputed Time Attendance and payroll software.