Statutory Compliance In The Indian Payroll Management System | UBS
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Statutory Compliance In The Indian Payroll Management System

January 6, 2023
Statutory Compliance

Statutory compliance is vital for any employee and employer, whether they are a government employee or not.  They are the schemes or laws defined by the government.

It is imperative for associations that intend to serve within the boundaries of the law. With or without intent, breaking the law can land you and your company in some danger.

Statutory Compliance

You may have overlooked some statutory compliance which could lead to some severe consequences in the Indian payroll management system.

To know more about it, you need to understand what is it.

What’s Statutory Compliance?

Statutory compliance in HR refers to the legal frame that must operate while dealing with employees.

India has several civil and state labor laws that companies need to align with. If you don’t take care of these laws you may fall into serious risk and has to pay a penalty. You need to deal with multiple issues and problems.

The laws are made to keep employees, employers, and the association safe and free of any liability. There are several compliances the advanced payroll software in India should take care of.

Companies must interact with employees so that they’re within the rules and laws of the nation and state they’re operating in.

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Importance Of Statutory Compliance In Payroll System

To stay, updated on statutory compliances is necessary for all big and small companies in India to keep their businesses safe from legal trouble. However, to stay with it, you need to have proper knowledge about it. It can easily minimize the threat associated with the resistance of statutory conditions.

There are a number of statutory conditions for Indian companies they have to spend a significant quantum of time in their payroll operation to ensure that they’re integrated with the legal regulations. However, they may have to face heavy penalties which are several times further than complying with legal guidelines, If companies fail to cleave to statutory compliances.

In today’s competitive and legal business world, it’s veritably grueling for employers to manage statutory compliances without good payroll software.

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List Of Statutory Compliances In India

It’s essential to make yourself familiar with all the applicable statutory compliances. So you need to know about Indian compliances. You need to ensure you have access to all compliances applied to Indian companies.

  • The Minimum Wages Act, 1948
  • The Professional Tax Act( PT) 1975
  • The Payment of Wages Act, 1936
  • The Child Labour Act, 1986
  • The Payment of Gratuity Act, 1972
  • Shops And Commercial Establishments Act ( S&E)
  • The Employees Provident Funds- 1952 ( EPF)
  • The Payment of Bonus Act, 1965
  • The Employees State Insurance Corporation Act ( ESIC), 1948
  • The Equal Remuneration Act, 1976
  • The Contract Labour Regulation & Abolition Act- 1970 ( CLRA)
  • The Factories Act, 1948
  • The Employees Compensation Act, 1923
  • The Apprentice Act, 1961
  • The Industrial Employment Act 1946
  • The Employment Exchange Act- 1959
  • The Industrial Disputes Act, 1947
  • The Industrial Establishment Act, 1963
  • The Trade Unions Act, 1926

If you take care of these compliance acts, you will not fall into any problems.

Why The Statutory Compliances Are Needed For Indian Payroll?

These are statutory conditions that companies have to follow for their payroll operations in India.

  1. TDS: Tax Deducted at the source. Every employer has to take TDS under section 192 of the IT( Income duty) act 1961 if the employee’s salary is higher than the taxation limit. There are some factors that affect TDS such as trip allowance, investments, education allowance, special allowance, HRA, and medical allowances. Payroll software like UBS provides this TDS process Automated In 3 Clicks.
  2. Gratuity: It’s an amount to be given to employees who have worked for at least 5 years in any company.
  3. Minimum Wages Act: This act requires fixing minimal wage prices for unskilled and skilled laborers. Under the act, it assured remuneration for minimal survival and takes care of their education, medical, and other needs. In India, this act should be compliance with the use of payroll software. Doesn’t worry, UBS will take care of it.
  4. ESI & PF Fund Deduction:  PF is the mandatory contribution of an employee for future purposes after retirement, and ESI is applicable to all those employees whose income is 15,000 INR or less per month. It can be regulated as per compliance.
  5. Professional Tax: PT is a state-based tax, and it is the statutory deduction from an employee’s gross income before computing tax.

These are some statutory compliance you need to take care of as an HR or employer or employee. If you don’t want to do it manually then you can consider it to get the best payroll management software.

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How UBS Can Help You?

UBS- HRMS has payroll software that can take care of all the forenamed statutory compliance conditions in India for businesses of all sizes. The software allows you to manage your employee’s PF, ESI, Personal Tax, and TDS and calculate payroll after regularizing all of these.

Does your company follow the rules and regulations? If as an HR you are failing in this, you must go for the best system that helps you to eliminate these mistakes in the future. We’re apprehensive about the different laws that are followed in India. Just get the right system.

Make your payroll process 3X faster

Alpesh Vaghasiya

Alpesh Vaghasiya

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