Industry Practices Mandatory Practices : To check Statutory Deduction as per Law for Income Tax, Profession Tax, ESI, Provident Fund, Labor Welfare Fund. TDS to be computed in line with declaration and not as input. Use marginal and Average rates for Tax Deduction at Source. Decentralized registration for Professional Tax (State wise), ESI Sub Code and other Local labour laws.

Industry Practices Non Mandatory Practices but recommended : Employee Self Service Option - For Historical Data, inputs for the current process and Simulations (Tax calculator). Minimize Deductions through the payroll System. Easy availability of information on Payroll process, Cut off dates, Forms and Rules. Web based payroll System. Integrated Time / Attendance management with the payroll system. Integrated Leave tracking mechanism. Issue electronic forms wherever possible (Salary slips, Tax computations and Form 16).

Industry Practices Direct deposit to employee Bank accounts. Automate Leave Encashment accruals. Link payroll changes to employee events. Link the payroll and human resources databases. Minimize payroll cycles (One per month is ideal). Reconcile Payroll Database with accounting entries and the HR Database periodically. Standardized formats for application and data inputs. Single Location for TDS & PF Payments. Suggested Cut off Dates for Tax declarations.