In India, organisations invest a lot of time to ensure that their payroll process is compliant with the local laws and regulations. Entrepreneurs also often worry about coming across legal problems related to statutory compliances.
On account of this, we consulted Finsmart Accounting – trusted for accounting outsourcing in India – to share the 4 statutory compliances that every organisation should consider in order to avoid legal troubles. Read on!
Payment of Wages Act, 1936
Under the Payment of Wages Act, employers have to process wages on a timely basis without any slashes. An organisation with an employee strength of less than 1000, needs to pay their employees before the 7th of every month. However, organsations with more than 1000 employees, have to pay their employees on the 10th of every month.
Minimum Wages Act, 1948
This statutory compliance in payroll defines that organisations must set a minimum wages rate for their company that is recognized by the provincial and central government of India. By complying with the Minimum Wages Act 1936, business owners are able to dodge fines and penalties related to the exploitation of labor.
Payment of Bonus Act, 1965
The Payment of Bonus Act, 1965 asks Indian businesses to pay a certain amount as a bonus to their employees based on their salary and profit within the accounting year. An employee who has worked for more than 30 days and drew 21,000 salaries is eligible to receive a certain amount as a bonus.
For those who don’t know, GST compliance is the performance rating given by the Indian government to show entrepreneurs how compliant are their businesses with existing tax norms. Although there are various GST compliances, they can be clubbed into three categories mentioned below:
- Registration compliance
- Tax invoice compliance
- Return filing compliance
Statutory compliance in payroll
Above are the 4 statutory compliances in payroll that organized businesses in India have to abide by in order to stay in the good books of government bodies.
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