PF-ESI Compliances
PF-ESI Compliances
Input Validation
As soon as it is collected, then the authenticity of data has to be approved since a minute of wrongness can spoil the whole payroll processing.
It should have all active employees on the list. There must be no records of inactive employees. The data should be according to company policy so ensure that it is in the proper format.
Payroll Calculation
This is the entry data for payroll processing as validated when fed into the payroll system for real processing. This would result in Net pay with necessary taxes and other deductions subtracted off.
Values reconciled once the payroll process is accomplished-it’s better to do it and verify its accuracy, less of which messes more.
Post- Payroll
Statutory compliance
The payroll administrator has to strictly comply with the statutory compliance. Various kinds of statutory deductions have been made during the payroll process such as EPF, TDS, and ESI.
The deducted amounts are then submitted to the relevant authorities or government institutions.
Payroll accounting:
In any organization, there is a proper book of accounts. The salary paid is one of the principal debits in the books of accounts.
Pay-out
After all the above steps, salary cheques can finally be issued either in cash cheque or bank transfers to the bank account. To avoid much hassle, it is advisable that salary accounts be opened for the employees.
Report
Final stage A report should be prepared after these calculations. An accurate report must be prepared that provides all the necessary information, such as department-wise or location-wise employee cost.
Different forms of payroll management
Excel-based payroll management
At the beginning of operations, as well as when a company is small with a few employees, they prefer an excel-based payroll management.
In case of an excel-based payroll management, the calculation is computed on an excel sheet using the standard payroll calculation template. The very mathematical formula set already helps the payroll officer to do the computation. The approach, however, has many errors in it like
High probability of clerical and mathematical errors; data entry is manual.
Extremely cumbersome process of adding and deleting employees on payroll list. Sometimes this creates opportunities for duplicate data and leaves out some entries.
Tax updations and other Statutory change like PF, PT etc. Shall be implemented. Payroll Outsourcing.
When the payroll is outsourced then an outside agency would be handling the payroll function. A payroll service provider based on the pay cycle every month provides various other data such as the attendance, leaves and reimbursement details.
The service provider computes the payroll and further ensures its conformity with the statute. As payroll is one of the major functions, IndiaFilings can help execute all needs. Challenges in Handling Payroll Management Process Because of the above two, processing the payroll management is not easy.
Compliance as a statutory necessity
Failure to comply with the statutory laws may attract penalties, and in the worst-case scenario, endanger the survival of the business. However, you process your payroll in accordance with the statutory laws by registering with IndiaFilings. Multiple sources of payroll inputs processing Pre-processing All the data received from different sources have to be collected before processing the payroll including the attendance register conveyance facility availed record, data from the HR team like salary revision information, etc. it is a very time-consuming process. HR and payroll managers were managing the payroll for years on excel sheets. And now, even this too has some problems associated with it. The pays are reliant on excel formulas for their computation, adding or removing employees is challenging, and many more restrictions like manual data entry; trouble in extracting information. Why IndiaFilings for HR and Payroll Management? We at IndiaFilings strive better to understand the aches businesses face in managing their human resource and payroll by giving holistic HR and Payroll management service. Accounting professionals and payroll professionals work hand in hand for the following advantages we bring to our clients: All-inclusive Payroll Support: Our HR and payroll management service is committed to providing comprehensive support for all the payroll needs of an organisation. With cutting-edge web and mobile applications, you keep track in real time the status of your payroll. Virtual Legal Assistance: You will get virtual CA/CS/Law services on all the things your company or employees want. Compliance Management: Our team will always keep you updated regarding compliance of your company to labor laws and the rest of government regulations. Payroll Processing Made Easier: Strong>We at Payoneer use the latest payroll software and dedicated accountants and tax consultants for streamlining all employee payroll management, including compensation and PF payments, as per a company’s pay cycle. Payroll management apart, we look after all labor compliances, from EPF registrations to TDS return filing and IT returns- -all under one umbrella-even naturally propelled by the expertise of legal minds. Electronic System: This electronic system helps you prepare and deliver pay orders, as well as monitor new hire information. Experience smooth and streamlined HR and payroll management, while always being in compliance with the government through IndiaFilings. Call now to learn more of the ways that we at IndiaFilings can help your business flourish.
ESI Compliances
ESI registration is a statutory compliance exercise in India for businesses, as overseen by the Employee State Insurance Corporation. The scheme provides Indian workers with a specific monthly income with social security and health insurance benefits, usually extending to dependents. According to the business type and location, it shall be applied for companies that have 10 or more employees.
IndiaFilings offers expert facilitation in making ESI registration hassle-free, namely, by providing comprehensive knowledge to the business of every regulatory requirement that needs to be complied with and hence ensures a hassle-free online ESIC registration process for your establishment. This helps secure wide-ranging benefits of the ESI scheme for your employees.
E S I Scheme
ESI is established under the ESI Act of 1948. It involves a scheme by the government towards providing social security. The ESIC manages this scheme. All employers are required to formally register their establishments with ESIC and submit information on the workers that can be included in the scheme.
Fully complying with the complex government regulations may indeed be a difficult task for employers. Fortunately, experts at IndiaFilings are here to help you with that same process.
Definition and Scope of Establishments under the ESI Act
The ESI Act deems any organized concern with either men or women, however sporadically spread it may be, to form an ESI or “factory”. This would include retail outlets and commercial shops-so long as they are paid up to Rs. 21,000/month, or Rs. 25,000 if they suffer from a disability provided it has 10 employees or 20 in some states-are liable to join the ESI scheme.
Who can take ESI Registration?
Official notification lists the following organizations linked to state governments to fall within the ambit of the ESI Act as per Section 1(5):
Trading shops
Eating houses or hotels selling merely
Theatres comprising preview tents
Transport businesses in roadways
Press enterprises falling outside the Factory Act
Private hospitals
Private educational institutions
Casual laborers of the Municipal Corporations or Bodies
These establishments shall enroll with the ESIC if they have 10 or more people in their establishment.
Central Government has also incorporated in Section 1(5) of ESI Act the following central government-owned organizations:
Retail stores
Hotels and restaurants
Road transport related organizations
Theatres, including preview houses
News paper organizations
Organizations dealing in:
Insurance
Non-Banking Financial Companies (NBFCs)
Port trusts
Airport administrations
Warehouses
For these government-connected organizations at the central level, a contribution to ESIC is mandatorily made if they have 20 or more workers.
Requirements for registration under ESI
Following are the requirements for getting registered under ESI:
According to Section 2(12) of the ESI Act, 1948, any establishment, factory, or shop that employed more than 10 workers are eligible for the ESI benefits.
It is available to all workers and their dependents, irrespective of their industry or sector, in the large number of hospitals and dispensaries run by the ESIC.
Maternity benefits under the ESI Act are available to women employees with gross salary less than Rs. 21,000 per month and persons with disabilities with gross salary less than Rs. 25,000 per month. This includes both medical and cash benefits, paid leave on account of various antenatal conditions such as pregnancy, post-delivery, medical termination of pregnancy, miscarriage, and adoption.
Benefits of ESIC Registration:
Registration with ESIC offers total benefits for employees health, income, and even family protection. The major benefits are discussed below:
Sickness Benefit: Through certified sickness periods, employees are entitled to get 70% of their wages up to 91 days a year.
Extended Sickness Benefit: Any one specific long term or serious disease entitles for benefit for two years at the rate of 80% wages.
Improvement in Sickness Benefit: Employees get full wage compensation for sterilization. This is for 7 days in case of Vasectomy and for 14 days in case of Tubectomy.
Medical Benefit: The employees are covered with complete medical benefits for their selves and the members of their families.
Retired Medical Benefit: The retired employees and their spouses, on payment of an annual premium of Rs. 120, are allowed continued medical benefits.
Maternity Benefit: Pregnant women will be entitled to full wages as maternity benefit for 26 weeks, extendable by a month, ensuring financial stability when she is giving birth.
Dependents’ Benefit: If an employee dies from an employment injury, dependents will be paid 90% of the wages of the deceased employees on a monthly basis.
Temporary Disablement Benefit: Pays 90% of the wages to employees suffering from an employment injury until the disability lasts .
Permanent Disablement Benefit: Monthly benefit according to the assessed loss in earning capacity by a Medical Board at 90% of the wages of employees who become permanently disabled.
Funeral Exp Elligibility: A fixed amount of Rs. 15,000 is paid to the dependents or the person performing last rites to meet funeral cost
Documents Required for ESI Registration
Following documents are required for ESI (Employee State Insurance) Registration and they must be provided in digital or electronic format for online registration at ESIC website:
There is no need for physical submission of documents for the purposes of online registration. The following list of documents to be uploaded during registration: Proof of registration of business : One among the following depending on the type of business Factories Act Registration Certificate Shops and Establishment Act Registration Certificate Registration under Incorporation Certificate, by the type of entity: that is, Company Registration Certificate in the case of a company; registration deed of partnership firms; GST Registration Certificate of establishment.
Incorporation Documents of Company:
Memorandum of Association (MoA).
Articles of Association (AoA).
Evidence of Address: One of the following
Utility bill not more than three months old, electricity, gas, telephone
Rental agreement issued for the establishment premises.
Property tax receipt issued for the place where the establishment is situated
Employee List: A collective list of all the employees employed at the establishment.
PAN Card: PAN details of the concern and all the employees.
Employee Remuneration: Details about the remuneration paid to all employees.
Banking Information: Cancelled cheque from the company’s bank account.
Company Leadership Details:
Directors in the company
Share holders in the company
Employee Attendance Register: Keep on updating the employee attendance register
Compliances After ESIC Registration
After obtaining ESI registration, an establishment needs to adhere to a few compliances in addition to filing necessary ESI returns. Such compliance is essential for a hassle-free run of the business with a judicious level as per these regulatory compliances. Some of the compulsory compliances in this list are:
Maintenance of Attendance Register: The establishment must maintain the attendance register at regular intervals in reporting attendance details of all staff. It is a fundamental document in terms of compliance and as an internal record.
Wages Register: Detailed wages register of workers may be maintained with extreme caution. This wage register is a compulsorily written document in keeping transparent records of salary details as well as calling for observance of ESIC rules.
Inspection Book: The premises should maintain an inspection book to detail any inspection carried out. The same would facilitate transparency and regulatory compliance at the time of any official inspection.
Submission of Monthly Return and Challan: The establishment should furnish monthly return and challan within the first 15 days of the subsequent month. The details of employees, their attendance, and associated contributions towards ESIC need to be furnished.
Accident Register: An accident register covering the accidents occurring on the premises is compulsory. The recording of accidents must be accurate for the purpose of maintaining compliance. It helps in a preventive approach to the safety of the workplace.
Online Process for ESIC Registration
The ESIC registration process has moved from a fully manual system to a completely online platform, so it is easier and quicker. Organisations that want to file their cases under ESIC can now do everything online through the ESIC website. IndiaFilings helps those unable to navigate online registration. We are well equipped with the complications of the online ESIC portal and will guide you through each step to make business registration hassle free for you.
Why Choose IndiaFilings for ESI Registration?
IndiaFilings has a team of experienced professionals, Chartered Accountants, and legal experts, working together to provide high-class legal and compliance ESI PF registration services in India. We understand the importance of an employer’s liability for the registration of ESI, thus taking on the task with utmost diligence and flair in minute details. Our Employee State Insurance Registration process is streamlined and efficient to save you precious time. Absolute clarity characterizes our service delivery so that you can have updates from start to the finish of the process. In case you have any questions while filling out the ESI application or filing, our skilled team will be more than ready to provide you with the advice and guidance you need.