Payroll System: Increase Company Efficiency

Corporate Secretary Service Indonesia – Have you ever heard the term payroll? Of course, this term is familiar to company employees because it relates to the payroll system. Nowadays, the calculation of employee salaries is done using a system that can speed up the salary calculation process. The manual process of calculating salaries is starting to be abandoned because it is difficult for companies with thousands of employees. This article fully discusses the definition of payroll, the process, and the latest payroll system that can improve the efficiency of the recruitment & payroll processing in the company.

This is the Meaning of Payroll

The Economic Times defines payroll as the process of paying employee salaries. In more detail, payroll is a payroll system that pays employee wages at a predetermined time, either weekly, monthly, or annually. This system is undoubtedly more modern and efficient, so it was created to replace the daily wage system. Employee data and compensation are things that are related to payroll. It should also be noted that payroll sometimes differs for every period due to absences, overtime, and other issues.

In running payroll, the HR division is responsible for processing the data of all employees, including the elements that determine the salary calculation. These components can be found on the pay slip and consist of:

• Base salary
• BPJS contribution
• Income tax deductions
• Allowance
• Meal allowance
• Overtime pay
• Transportation fee

Quite a lot of components in the payroll process must be considered carefully. With a payroll system, the payroll process can be automated but still safe and transparent.

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Stages in the Payroll Process

Recruitment & payroll processing has several processes, starting from planning payroll policies and continuing until employees receive wages. In general, there are three payroll processes, namely:

1. Pre-payroll

This is the initial stage where the company determines payroll policies regarding attendance, overtime, allowances, and leave. In addition, some laws and regulations must be considered related to payroll, such as policies on BPJS Health and Employment and Income Tax 21.

Then, the company will collect employee data for salary calculation purposes. After collecting the data, its validity will be checked so that the payroll is in accordance with company policies. Thoroughness is needed in this process to avoid fatal errors that cause employees not to receive their rightful salaries.

2. Payroll

The validated data will be entered into the payroll system. This stage calculates the net salary adjusted with deductions and taxes. After this stage, data accuracy verification is carried out to avoid errors.

3. Post-payroll

In this stage, the HR division works with the Finance division to record financial transactions during payroll. After the transactions have been recorded, salary payments can be made to employees’ bank accounts along with the distribution of pay slips.

Pay slips are mandatory because they prove that the company has fulfilled its obligation to pay employee salaries. Not only that, pay slips also function as payment documentation for the Finance and HR teams.

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