Introduction
Welcome to your comprehensive guide on how to effectively use the Payroll Processing feature in Empress Talent. This tool is crucial for any business as it simplifies the process of managing your employees’ salaries. It allows you to customize income tax slabs, define salary components, assign salary structures, and more.
Understanding the Significance of Payroll Processing
Payroll Processing is an essential function of any business. It ensures accurate and timely payments to your staff. With Empress Talent, you can streamline the process, ensuring all elements such as income tax, salary components, and salary structures are correctly set up. This feature is particularly helpful for businesses operating under the Indian Income Tax system.
Step-By-Step Guide to Payroll Processing
1. Create a Payroll Period
Start by defining a Payroll Period. This refers to the timeframe for which you want to process the payroll. Your company’s financial year determines the period, for example, January to December or April to March.
2. Create Income Tax Slabs
Next, create Income Tax Slabs. If you operate under the Indian Income Tax system, you can define multiple slabs as per government regulations. You can add extra taxes and conditions, and if a standard deduction applies, ensure you check ‘Allow Tax Exemption’.
3. Submit Employee Tax Exemption Declaration
At this stage, employees can submit their Tax Exemption Declarations. If they have qualifying investments, this will help reduce their Income Tax amount. Deductions can fall into various categories like 80C, 80D, etc. (Applicable for Indian Taxation).
4. Define Salary Components
Next, you need to create Salary Components. Specify whether each component is an Earning or a Deduction. Depending on the component type, you can select certain checkboxes. Assign a default ledger account to the company. The salary components can be based on a formula or a fixed amount. For the Income Tax component, select the “Variable based on Taxable Salary” checkbox to enable automatic calculation of Income Tax.
5. Create a Salary Structure
After creating salary components, define a Salary Structure. Decide whether the salary is based on timesheets. Add your preferred earnings and deductions and specify the mode of payment.
6. Assign the Salary Structure
Assign the created Salary Structures to your employees. Remember, if you skip this step, you cannot proceed further. During assignment, select the Income Tax Slab (if you have multiple slabs) as the Income Tax deduction percentage will be based on it. If your salary structures are based on formulas, you can also define a base amount.
7. Create a Payroll Entry & Salary Slips
Now, create a Payroll Entry. Select the payroll date, frequency, and add the payment account. You can filter employees based on department, designation, and branch. Or, click on ‘Get employees’ to populate a list of all employees in the Employee Details section. Click on “Create Salary Slips” to generate all the salary slips in draft. Make sure you check these draft salary slips before submitting them. Submitting the salary slips will create an accrual journal entry, which means the system books the salary expenses without paying them.
8. Bank Entry
Finally, make a Bank Entry. This step marks the completion of your payroll process. However, it does not mean that the salaries have been transferred to the bank. This final step needs to be done manually.
Conclusion
The Payroll Processing feature in Empress Talent allows you to manage your payroll efficiently and effectively, ensuring your employees are paid accurately and on time. Follow this guide to make payroll processing a breeze in Empress Talent. For additional assistance or resources, feel free to reach out to our support team.