Introduction
Introduction
Managing payroll and tax calculations can be a daunting task, especially for large businesses. However, with Empress HR, this process can be significantly simplified. This guide aims to show you how to configure Empress HR to streamline your payroll and tax calculations, making this aspect of your business operations more efficient and less time-consuming.
Feature Overview
Empress HR offers a feature that automates the process of tax deductions during the creation of Salary Slips. This feature is hinged on the configuration of Income Tax Slabs, which calculate tax based on an employee’s projected annual earnings.
Empress HR also allows employees to declare tax exemption amounts at the beginning of the fiscal year. This declaration influences the calculation of payroll deductions, ensuring they are based on the projected annual earnings minus the exemption. If an employee fails to make this declaration, monthly deductions are calculated without any exemption.
How to Use the Feature
Employee Tax Exemption Declaration
Empress HR provides a user-friendly interface where employees can declare their exemption amounts. This is done through the Employee Tax Exemption Declaration.
Employee Tax Exemption Proof Submission
At the end of the year, employees are required to submit proof of their expenditures for filing. This is done through the Employee Tax Exemption Proof Submission. If no proof is submitted, the tax for the exempted income is added to the standard deduction component.
Configuring Employee Tax Exemption Categories
Empress HR allows you to set up different categories eligible for exemption. This can be done by navigating to:
Human resources > Payroll Setup > Employee Tax Exemption Category > New Employee Tax Exemption Category
Configuring Employee Tax Exemption Sub Categories
Within each category, various sub-categories eligible for exemption can also be set up. This can be done by navigating to:
Human resources > Payroll Setup > Employee Tax Exemption Sub Category > New Employee Tax Sub Exemption Category
Additional Options in Payroll Entry and Salary Slip
Two options are available for further automation and simplification of the payroll process. These are:
- Deduct Tax For Unclaimed Employee Benefits: This option allows for the inclusion of untaxed benefits in the taxable earnings of the employee if they fail to submit an Employee Benefit Claim.
- Deduct Tax For Unsubmitted Tax Exemption Proof: This option allows for the deduction of taxes for earnings that were exempted in previous payrolls but for which the employee hasn’t submitted sufficient proof.
Configuring Income Tax Slab
The Income Tax Slab is a feature that helps you define Tax slabs applicable for the period. This makes it easier to manage changing laws. You can add multiple tax slabs for the payroll period depending on the tax regulations.
Configuring Salary Component
To enable automatic tax deduction based on Tax slabs, a Salary Component of type Deduction with the Variable Based On Taxable Salary option enabled must be configured. This allows for auto calculation of Income Tax considering the tax slabs and declaration submitted by an employee.
Conclusion
Empress HR is designed to make the administration of payroll and tax calculations easier for businesses. By properly configuring the options and features provided by Empress HR, you can automate most of the complex calculations and processes involved in payroll and tax management. This not only saves time but also reduces the risk of errors. For further assistance, feel free to contact our support team or explore our additional resources.