Dear HR Friends,
I would like to know about payroll calculations or what is the common standards of Payroll calculations.
Few Queries:
1) Should be calculated on 26 days (sundays excluded)
or
2) On 31 or 30 days
Pls help
Sweta
From India, Kalyan
4I would like to know about payroll calculations or what is the common standards of Payroll calculations.
Few Queries:
1) Should be calculated on 26 days (sundays excluded)
or
2) On 31 or 30 days
Pls help
Sweta
From India, Kalyan
Hi Shewta, Normally it is 30 or 31 days with 4 paid sundays. It depends on the company policy what they want to consider. It has to be 31 and 30 days. Suresh Sharma
From India, Jaipur
From India, Jaipur
Hi Shweta, I agree with Suresh. It depends on company policy. But it has to be 30 or 31 days. Normally 30 days. Neha
From India, New Delhi
From India, New Delhi
Dear Friend, As I understand, it is calculated on 26 days, (minimum wages act 1948) Regards S. Achuthananda
From India, Pune
From India, Pune
Dear Sweta
Payroll generation depends totally on number of days in month. Say feb (28 days). you will pay total salay package accordingly, but while deducting a LWP it would be calculated on basis of 28 days.
Thus its irrespective of any number of holidays etc.
Pls ask if you have any particular query regarding calculation of Payroll.
Rgds
Vishal Rana
From India, Patiala
Payroll generation depends totally on number of days in month. Say feb (28 days). you will pay total salay package accordingly, but while deducting a LWP it would be calculated on basis of 28 days.
Thus its irrespective of any number of holidays etc.
Pls ask if you have any particular query regarding calculation of Payroll.
Rgds
Vishal Rana
From India, Patiala
hi,
Ya you are right but the number of hours a person has to work is 48 hours in a week. So on the basis of the hours a person would be working for 26 days and not 31 or 30 days. Basically it is the policy of the company which would define the pay for number of days worked. Moreover most of the companies in order to provide benefit to employees calculate salary on the basis of 30 or 31 days as the deduction in salary for absent and unpaid leave will be based on 30 or 31 days of working with four paid sundays.
Suresh Sharma
From India, Jaipur
Ya you are right but the number of hours a person has to work is 48 hours in a week. So on the basis of the hours a person would be working for 26 days and not 31 or 30 days. Basically it is the policy of the company which would define the pay for number of days worked. Moreover most of the companies in order to provide benefit to employees calculate salary on the basis of 30 or 31 days as the deduction in salary for absent and unpaid leave will be based on 30 or 31 days of working with four paid sundays.
Suresh Sharma
From India, Jaipur
For salaried personnel an average day rate can be done i.e. 325.25/12 = 30.44.
Salary/30.44.
Now suppose if 27 days are to be paid in Feb.
[Salary]-([Salary]/30.44)*1 (days not paid).
Suppose if 1 day is to be paid in december
[Salary]-([Salary]/30.44)*30 (days not paid).
From India, Panipat
Salary/30.44.
Now suppose if 27 days are to be paid in Feb.
[Salary]-([Salary]/30.44)*1 (days not paid).
Suppose if 1 day is to be paid in december
[Salary]-([Salary]/30.44)*30 (days not paid).
From India, Panipat
Dear All,
There is lots of interpretation on the salary calculations, in the above case, if the payroll is run for the no. of days in the month, the following illustration will be found to incorrect.
for eg. One month salary for Mr.X is 6000 (Basic - 4000 + DA 2000)
The salary for 31days in Jan will be 6000 (6000/31*31days), his PF will be 6000/31*31 X 12% = 720 (i.e. per day PF will be 23.23)
But in the month of Feb his salary will be 6000 (6000/28*28days attended), his PF will be 6000/28*28x12% = 720. (i.e. per day PF will be 25.71)
Now check the PF contribution of Jan & Feb, the PF wages is increased. If the salary is fixed, the PF contribution should also be same. This difference will create a lot of problem in PF inspection.
So, as stated by The Industrial Employment (Standing Orders) Act, 1946 (Ref. model Standing Order) the salary should be calculated on 30days for Monthly rated employee and 26days for daily rated employee, to maintain the constant PF deductions & LOP of an employee.
Any further interpretation is welcomed.
Rgds,
Suresh Ramalingam
Consultant - Compliance
From India, Mumbai
There is lots of interpretation on the salary calculations, in the above case, if the payroll is run for the no. of days in the month, the following illustration will be found to incorrect.
for eg. One month salary for Mr.X is 6000 (Basic - 4000 + DA 2000)
The salary for 31days in Jan will be 6000 (6000/31*31days), his PF will be 6000/31*31 X 12% = 720 (i.e. per day PF will be 23.23)
But in the month of Feb his salary will be 6000 (6000/28*28days attended), his PF will be 6000/28*28x12% = 720. (i.e. per day PF will be 25.71)
Now check the PF contribution of Jan & Feb, the PF wages is increased. If the salary is fixed, the PF contribution should also be same. This difference will create a lot of problem in PF inspection.
So, as stated by The Industrial Employment (Standing Orders) Act, 1946 (Ref. model Standing Order) the salary should be calculated on 30days for Monthly rated employee and 26days for daily rated employee, to maintain the constant PF deductions & LOP of an employee.
Any further interpretation is welcomed.
Rgds,
Suresh Ramalingam
Consultant - Compliance
From India, Mumbai
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