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No service or product can exist without the collective efforts of many. One man cannot run the show. Therefore, it is imperative that you employ people to help you in various aspects of running your office or business. And with employment comes the responsibility of ensuring that the employees get paid justly and on time. This is where payroll steps in.
The term payroll implies a rolling of the pay cycle at regular intervals of time. These could be daily, weekly, fortnightly, monthly or even longer periods of time. This means that the employees are paid salaries or wages at repeated regular intervals of time as per the attendance they have recorded.
The term payroll broadly means a list of all the employees, contractual, temporary, or permanent employed. It shows the total money paid or spent on employees while encompassing several verticals like wages, salaries, contracts, bonuses, reimbursements, pay or tax deductions, etc. It also records the leaves taken by employees while calculating this.
Payroll legislation in Dub and as everywhere else demands something called compliance. It simply means following the rules and regulations of the place in terms of hiring employees, fixing their wages and taxes, bonuses, claims, leaves, compensations, overtime charges etc. This takes care of the legal requirements of the state or the center and is generally the same in all countries with minor differences.
Payroll is crucially linked to taxes and deductions while handling state and federal compensations, legal claims and other issues while employing and paying. It keeps track of Taxes deducted at source and ensures timely filing of income tax returns. This saves you a lot of stress and efforts. The responsibility of paying taxes doesn’t end here. A payroll report has to be prepared on the taxes paid to the government as well those deducted from the employees’ wages and submitted regularly in the Dubai and other places for both the state and central government.
Payroll is very important as there has to be a system of paying employees on time as per the time period fixed while employing someone. It follows something called the payroll policy which is based on the standards of payroll, labour laws etc. Payroll policies in Dubai are very strict. Employees work for wages; they need to be paid on time each time to keep motivated to put in their efforts to make your business run steadily and stably.
Though employees are paid as per the policies, rules, and regulations, there are other financial aspects too. Payroll not only pays wages to the employees, but also takes care of certain welfare measures. These include health insurances, medical entitlements, claims of compensations, overtime wages etc. Employees also get their dearness allowances, bonuses, and commissions on time with the help of payroll and payroll management.
The term payroll is known by several other names like pay sheet registers, salary remunerations, and pay wages to name a few. It is different from the term salary which is simply the amount of money fixed as emolument or remuneration for the work done by the employee. On the other hand, the term payroll means the entire process or system of giving that money to the employee.
Another term that is confused with the word payroll is Human Resource or HR. HR deals with hiring and selecting the employees; managing them or looking after them; and maintaining good relations with them. It has not much to do with the financial aspect of compensating them for the work they do. HR has the responsibility of maintaining employee data and feeding it into the payroll system. For example, the payroll management system in Dubai as in other places does calculations of the amount of money transaction involved as per data fed in.
There is another aspect of the term payroll. It is the calculation of the final pay that will be given to the employee. The product of the number of hours an employee works and the rate he will be paid per hour are used to calculate the gross payment he will get. After that, the taxes are calculated and deducted from the gross payment to fix the final payment due. This amount is regularly and periodically paid on time to the employees through the payroll management system.
The effective handling of all these verticals is payroll management. It keeps records of all these transactions for a company or firm. It also records the number of hours that an employee as worked in the day, week, fortnight, or month etc. It maintains records and disburses provident fund or gratuity of the employees too.
This system has certain processes that have to be followed for its effectiveness. Once the employees are selected to work, information about their dependents, the wages or allowances fixed as per terms and conditions of employment etc is collected. Each employee is given an EIN or an Employer Identification Number which is used for paying salaries as well as for deducting and filing taxes. A payroll schedule is fixed for the disbursement. Once this is decided upon, the payroll management systems start working. Pay checks, taxes, and deductions are calculated and the final payout amount is fixed. The process of payroll management culminates with filing of taxes to the government. Payroll systems in Dubai are well in place to collect these taxes.
There are many payroll management systems in Dubai as well as other countries. You can choose from the available ones as per your requirements, budget, and the services they offer. Some of them are OnPay which is user friendly and easy to use. The Gusto system is comprehensive on all aspects of payroll like a good software, compliances, taxation etc. Some more are EPAY systems, Patriot Software, etc.
Once you understand the terms payroll and payroll management, you will find it easy to handle this important area or your work and do well in your core business.