Every company has to process and execute payroll services, irrespective of it being small or large. You have to follow a set of rules when performing payroll calculations which make the process both time-consuming and challenging. There are even a few situations when business owners end up wrongly interpreting the laws and have to pay fines. The best way you can execute payroll accurately is by outsourcing the task to a reliable company. They have years of experience and can help you debunk the myths about employee payroll services.
3 Common Myths About Employee Payroll Services Have Been Debunked
- “PF Is Calculated On Your Basic Salary.”
If you think that the only thing you have to consider during PF calculations is your basic salary, it’s high time you debunk the myth. Instead of the basic salary, you have to consider the fixed salary of the employee. Allowances paid by an employer as a part of basic wages are also considered as PF contributions.
- “You Can Claim LTA Deduction Every Year.”
Though there are a few employees who submit their LTA bills to their employers to claim tax benefits every year, the practice is unethical. You should claim your LTA deduction only twice every 4 years. The exemption is calculated on the travel cost incurred or the LTA received by the employee.
- “You Can Include Medical And Transport Allowance In CTC.”
The practice of including medical and transport allowance in the CTC structure has become redundant. In fact, it is considered to be irrelevant to include medical and transportation allowances. The finance minister introduced a standard deduction in 2018 which has replaced the medical and transport allowance tax benefits.
These being said, the common myths about employee payroll services have been debunked.