Professional Documents
Culture Documents
Payroll India
This training focuses Payroll India requirements and related functionality in SAP.
Agenda
Statutory Infotypes
Regulation Income Tax Infotypes 0580 Previous Employment Tax Details 0581 Housing (HRA / CLA / COA) 0582 Exemptions (LTA, MDA, CEA, CHA) 0583 Car & Conveyance 0584 Income from other sources 0585 Section 80 Deductions 0586 Investment Details (Sec 88) 0589 Individual Reimbursements 0590 Long Term Reimbursements 0591 Nominations 0588 Other Statutory Deductions (PTX) 0587 Provident Fund 0587 Provident Fund 0588 Other Statutory Deductions (ESI) 0588 Other Statutory Deductions (LWF)
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Professional Tax Provident Fund Pension Employee State Insurance Labour Welfare Fund
0580 Previous Employment Tax Details Tax in the current financial year, by capturing the salary, exemption, contribution, deduction details of the employee pertaining to the previous employments in the current financial year Previous Employment Tax Details payroll function (INPET)
SAP system Provides the following categories of accommodation Rented Accommodation (systems computes an exemption ) Company Leased Accommodation (CLA ) Company Owned Accommodation (COA) If an employee has a CLA/COA benefit, the system will compute the perquisite applicable on the COA. Hotel Accommodation If the employer provides a hotel accommodation to the employee. If the stay in the hotel exceeds a fixed period, as specified by the Government, a perquisite is applicable on the cost of accommodation. Payroll function INHRA
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Employer PF contribution: 12% - Pension amount Max 541 Per Month PF admin charges: 1.10% Employer Pension is 8.33% of Rs. 6500 = Rs. 541 EDLI contribution: 0.50% of PF salary (or Max 6500 ) = Rs. 32.50 EDLI admin charges: 0.01% of PF Salary (or Max 6500) = Rs. 65
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P.Tax Professional tax is a statutory tax that state governments levy on professions, trades, callings, and employment Professional tax slabs Employee salaries fall within different salary ranges or slabs, and the amount of professional tax to be paid depends on the salary range to which the employee belongs. Every state specifies its own salary slabs and the professional tax rate that is applicable for a salary range. Function INPTX ESI This component calculates the Employee State Insurance (ESI) contribution: To be deducted from the salary of the employee. To be made by the employer ESI Basis of the employee is less than or equal to the amount stored in the ESI Eligibility Limit constant (ESILT) at present 10,000 P.M(w.e.f 01.10.2006 ) April 1 - September 30, or October 1 - March 31 employer ESI contribution of 4.75% of the ESI Basis ,Ee ESI contributio nis 1.75%
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LWF This component computes the contribution towards Labour Welfare Fund (LWF). LWF is a statutory contribution. The state authorities determine the rate of contribution and frequency of contribution towards LWF
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Statutory Reports
Regulation Income Tax Professional Tax Provident Fund Pension Employee State Insurance Labour Welfare Fund Monthly LWF Report Monthly Form24 (Quarterly ) Monthly PTax Report Form 5, 10 and 12A Form 4, 5 and 6 Form 3A and 6A Form 7 and Form 8 Form 6 and 7 (semiannual) Annual Form 16 and 24
Companys Act
Form 217(2A)
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Gratuity / Superannuation
Gratuity
Paid on termination or retirement as per company policy Contribution only by employer Statutory requirement: 15/26 (i.e. 4.81%) of salary Payment of Gratuity Act, 1972 Where the minimum amount that you need to contribute towards gratuity is 4.81 percentage of the monthly basis salary of the employee. Income Tax impact: Exempt for employee upto 350,000. Treated as expenditure for company and reduces income tax
Superannuation
Definition: Superannuation is a non-statutory benefit provided to the employee on the cessation of his or her services. The employer contributes to a Superannuation trust so as to provide for payment at the time of retirement. Key Facts on Super Annuation : a) Normally the Company has a link with agencies like LIC Superannuation Fund, where their contributions are paid. b)The Company pays 15% of basic wages as superannuation contribution. There is no contribution from the employee.
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