An important aspect of payroll management is to ensure that the company is compliant with all state and central government laws and rules.
Every employer who hires employees and pays salaries must comply with the labour laws enacted by the Indian central and state governments. These laws ensure that the employees are paid and treated fairly. Compliance helps employers avoid legal penalties and unreasonable employee demands.
There are five important statutory compliance commitments as far as Indian payroll is concerned.
All these compliances require employers to calculate an amount, deduct it from the employee's salary and then remit that amount to the government organisation. These are also referred to as Statutory dues. Timely payment of these dues will help avert hardship for employees and penal actions against employers.
Once the remittance is made, a report also needs to be filed with the concerned department as per law.
The following activities are part of statutory compliance work: