India-based Neobanking Fintech Razorpay Explains How RazorpayX Payroll Automates Everything Payroll
Indian neobank Razorpay recently shared payroll compliance mistakes that businesses should try to avoid.
The RazorPay team explains that payroll compliance is one of the “most important” processes a business performs in order to maintain operations. All businesses in India and globally must meet legal compliance requirements related to fair cash disbursements to their workers, Contingency Fund and ESI enrollment, statutory tax deductions, calculation and payment of tips, bonuses, pensions, etc.
However, payroll compliance tends to be quite complicated, which is why RazorPay has shared common mistakes businesses should avoid.
As mentioned in a Razorpay blog post, companies need to improve their data / documentation processes. As Indian firm Fintech noted, inaccurate and manual recording of data and documentation of incorrect employee information are among the most common mistakes.
Razorpay adds that companies “also make the mistake of wrongly classifying their employees, which leads to gaps in the legal (audit and tax) requirements of their salary structure.” For example, registering part-time workers as temporary employees or full-time employees as independent contractors. These errors can “lead to audit disputes and tax penalties for the company,” notes the firm Fintech.
The company also mentions that the Payment of Wages Act, 1936, demands that companies “pay their employees in a timely manner.” Despite legal compliance, “late payments are the most common payroll error made by businesses,” reveals Razorpay. This may be due to reasons such as “non-availability of timesheets, work records or employee reports, or blockages with banks,” the company explains.
Razorpay further notes that companies can also make errors such as “failing to report benefits or the benefits they provide to their employees as part of the payroll”. The Fintech company points out that it could include company-provided transportation and accommodation, stock options, gift cards, healthcare, vacation pay, etc. .
Razorpay adds that companies must “register and file reports with the relevant authorities on ESI and EPF contributions to employee salaries.” The company specifies that in the absence of an automated payroll processing tool, they “often miss the submission deadlines, resulting in either a delay or a failure in the filing of these reports, and pay by therefore heavy penalties “.
Razorpay Confirms Businesses “Must Adhere to Two Critical Payroll Compliance Legal Obligations [requirements.]“Their credibility” deteriorates if they don’t accurately calculate and pay PT, deduct TDS from their employees’ salaries, and file tax returns and TDS report with tax authorities in a timely manner. “They” face the legal and financial implications of failing to meet tax filing deadlines in the form of heavy late payment penalties, “the Fintech company noted.
“Security breaches occur due to the manual processing and management of payroll data. It exposes companies to probable salary frauds, such as the theft of their employees’ confidential information (details of their salaries, taxes, bank account, PAN, Aadhar card, rental contracts, etc.), embezzlement of funds from payroll and unauthorized issuance of salary and TDS certificates. Even though payroll data is stored on spreadsheets, system password hacking makes it vulnerable to abuse.
According to Razorpay, an automated payroll solution is “the way to go to avoid all of those payroll and compliance errors.” The neobank also noted that an automated solution is able to store all payroll data and records in a centralized location and in a more organized manner, “upon employee onboarding.”
As explained by the Fintech company, this approach “automates the process of recording up-to-date employee data, performs complex and time-consuming salary and tax calculations, recalls the deadlines for filing taxes, EPF and ESI, and generates errors without error. reports on employee salary structure and payroll disbursements.
The company also mentions that RazorpayX Payroll was developed to “automate everything related to payroll, from employee onboarding to salary payments and tax payments” and that “the specially designed features meet the payroll requirements of SMEs and startups ”.
The software supports payroll payments and filing compliance guidelines such as TDS, PF, ESI and PT. It also allows “your employees to access their own account, where they can easily declare investments, view / download payslips, apply leave,” adds the company. (Note: To learn more about these products, see here.)