The administration of an employee's financial record includes information on salaries, wages, bonuses, net pay and deductions. A record of an employee must be kept with an employer for at least four years. Also, there are at least 20 kinds of records that should be kept of an employee with an employer.
Payroll services may be outsourced to companies such as Boundless. The benefit of outsourcing is to keep the business head out of the overhead of changing laws and remembering them. This saves them time too and this time, can be involved in other business activities by them.
Cost is also saved by outsourcing payroll management to other companies. If there are more than 1000 number of employees in an organisation, then it is really crucial to outsource the services to a separate company such as Boundless since managing this huge amount of data becomes difficult.
In this method of outsourcing, data is provided to the outsourced firms with the following functions also performed by them:
· Quality audit procedure and planning
· Employee insurance and provident fund processing
· Medical claim processing
· Payroll record analysis
· Payroll tax analysis
Payroll may be managed monthly or yearly. When maintained monthly, house rent allowance, conveyance and other allowances such as mobile are considered. Some deductions are made such as taxes, provident fund etc. Tax deductions are made only from an employees' salary where there are applicable for an employee. Dearness allowance and HRA are provided at a fixed rate while the provident fund is deducted on a monthly basis.
Annual payrolls, when provided, comprises annual bonuses, meal vouchers, medical reimbursements, incentives, leave travel allowances etc.
Bonuses, allowances, reimbursements and incentives are based on policies of an organisation. Some companies provide them on performance basis while some provide on a fixed rate basis.