[Company Logo][Company Name]
- Policy No.:
- [Reference Number]
- Version:
- [Version Number]
- Effective Date:
- [Date]
- Policy Owner:
- Finance & Human Resources
1. Purpose
This policy ensures that employees of [Company Name] are paid correctly and on time, statutory deductions and remittances are made as required, and payroll data is processed with proper controls and confidentiality.
2. Scope
It covers all employees on the company payroll at all locations. Payments to consultants and contract labour through vendors are outside this policy.
3. Definitions
- Pay period: the 1st to the last day of each calendar month.
- Cut-off date: the [Number] day of the month, after which inputs move to the next payroll.
- Payroll inputs: attendance, leave, overtime, joiners, exits, salary changes, reimbursements and deductions.
4. Policy
- Salary is credited to the employee's bank account on or before the [Number] day of the following month. If that day is a holiday, it is paid on the previous working day.
- Salary is paid on the basis of attendance and leave records approved in [HRMS].
- Statutory deductions are made as applicable: EPF at 12% of basic + DA (subject to wage ceiling rules), ESI at 0.75% employee share where wages are up to ₹21,000 per month, professional tax per state, and TDS on salary as per the employee's declared tax regime and investments.
- Employer contributions to PF and ESI are deposited within statutory due dates.
- Payslips are issued by the [Number] day of the following month; Form 16 is issued annually within the timeline under tax law.
- No deduction other than statutory or employee-authorised deductions will be made.
- Salary advances up to [Amount] or [Number] month's basic salary may be approved once in [Number] months, recovered in [Number] instalments.
5. Procedure
- HR freezes attendance and joiner/exit data on the cut-off date.
- Payroll executive (maker) processes payroll and generates a variance report.
- Finance Manager (checker) reviews variances above [Number]% and approves.
- [Authorised Signatory] releases the bank transfer file.
- Corrections reported after release are paid or recovered in the next payroll as arrears.
6. Responsibilities
- HR: accurate attendance, leave and employee master data.
- Payroll/Finance: processing, statutory remittances and returns.
- Managers: timely approval of attendance and overtime.
- Employees: update bank details, PAN, UAN and tax declarations on time and report errors within [Number] days.
7. Non-compliance
Manipulation of payroll data, unauthorised access to salary information or false claims will be treated as serious misconduct. Overpayments will be recovered with the employee's written consent or as permitted by law.
8. Review & Approval
Finance and HR will review this policy annually and whenever tax or wage rules change.
Prepared by
[HR Name]Human Resources
Approved by
[Authorised Signatory][Designation]Date:
[Date]