Payroll for different types of employees
1. Regular - payroll is processed for these employees, Basic salary is the compulsory head around which salary structure is built, all statutory deductions like TDS, PF, ESI, Labor Welfare Fund, ESI and payout of bonus as per Bonus Act are supported
2. Retainer - payroll is processed for India and the amount being paid can be
modeled but only one head is allowed, this is treated as Professional Income.
Tax deduction depends upon the type of Retainer as there are different tax rates.
As of now three categories of Retainers are modeled in EazeWork HRMS -
a) Professionals : TDS is deducted @10% under section 194J if aggregate payment
in a financial year exceeds or will exceed INR 30,000
b) Contractor Individual : TDS is deducted @1% under section 194C for Individual
or HUF
c) Contractor Others : TDS is deducted @2% under section 194C for other categories
Under section 194C TDS is deducted if payment > INR 30,000 in one transaction or if the aggregate payment exceeds or will exceed INR 100,000. Please refer to the Income Tax laws for more detailed understanding. If PAN Number is not available then TDS will be deducted @20% even for Retainers. If employees are not filing their income tax returns and their total TDS / TCS is more than INR 50,000 in previous two years then their tax would be deducted at a higher rate, refer to the article on Deduction under Section 206AB for more details.
3. Trainee / Apprentice - stipend can be paid to trainees. No statutory deductions like TDS, PF, ESI, LWF or PT would be applicable for trainees.
5. Expat - In some countries expats have different compliance requirements vis a vis the local employees. To model these employees Employee type= regular and Work status = Expat should be selected. Expat payroll is supported for - India, Democratic Republic of Congo, Nigeria and Saudi Arabia.
In India for Expats the Provident Fund is deducted on actual wages and the ceiling of INR 15,000 which is applicable for local employees is not applicable.
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