What is Payroll and HR Company Management?
As a business owner, you need competent human resources in your company. Human Resources (HR) management is required so that the activities run well and the company achieves its desired targets.
Let’s find out more about HR and its importance.
Definition of HR Management
Human Resource Management (HRM) is one of the fields of general management, such as financial management, marketing management, and operations management.
Human resource management is an essential field of study in the company because the problems faced by the company are not only the problems of raw materials, capital, work tools, and production but also the problems of human resources, who are the ones who run and manage the factors of production as well as the purpose of the production activities themselves.
What HR Management Do?
The task of Human Resource Management (HRM) is to manage people as effectively as possible to obtain a mutually beneficial human resource unit. Human Resource Management (HRM) is part of general management, focusing on human resources.
HRM is a field of study that studies how human roles and relationships help to achieve the goals of organizations and companies.
In principle, the human resource management function includes several activities that significantly affect the entire work area of a company, including planning, hiring, and firing employees, wage benefits, performance appraisals, rewards and career development, training and development, occupational safety and health, leadership, and productivity. The functions of human resource management are as follows.
Definition of Payroll
The term payroll is familiar to employees who work in companies. Payroll means the payroll system in a company.
Payroll is a payroll scheme from the company to employees for a certain period of time whose disbursement date has been determined. Understanding payroll system will make processing employee payroll easier because the calculations are done automatically and accurately.
This will undoubtedly be very helpful, especially for large-scale companies with hundreds to thousands of employees.
In large companies, payroll is managed specifically by the finance department. In relatively small companies, payroll is often handled directly by the company owner.
Not only the nominal salary but also the wages that go into each employee’s account have been calculated, including various components, such as overtime, bonuses, insurance, and tax deductions. The process is done automatically using certain applications or software.
Payroll Tax
Payroll tax is a tax that is withheld by the employer from the worker’s salary and paid to the government on behalf of the worker. This tax is based on employee’s gross pay, tips paid to employees, and wages. This tax is withheld directly from the employee’s income and paid to the Internal Revenue Service (IRS). In addition to income taxes, payroll taxes are collected by federal authorities and some state governments in many countries, including the U.S.
It is a tax on income in the form of salaries, wages, honoraria, allowances, and other payments in whatever name and in whatever form related to work or position, services, and activities performed by individuals who are a tax subjects.
How Payroll Works
How does payroll work? Employee payroll usually includes basic salary, meals, transport, overtime pay, and other benefits. Companies use several types of payroll, ranging from manual to the most sophisticated. They can use professional services and outsource their payroll or use payroll solutions if they do not want to do it themselves.
Because there are many factors that affect the nominal salary of each employee, payroll requires careful planning.
a. Pre-Payroll
This is the first step in determining a company’s payroll policies. These policies usually relate to leave, allowances, overtime, and attendance.
Companies in Indonesia must also pay attention to the prevailing laws and regulations in implementing payrolls, such as the BPJS Kesehatan policy, BPJS Ketenagakerjaan, and PPh 21 calculation. This policy will later be approved by the management and become the standard payroll process of a company.
Next, employee data, such as attendance or salary changes, need to be collected and processed into salary calculations.
When creating the employee data report, the HRD team must customise the employee report and company report to the required format. A payroll application with a Custom Report feature is a solution for this kind of customisation.
Then, the validity of the collected data is checked. This check ensures that the payroll is accurate and in accordance with company policies.
b. Payroll
After the employee data has been validated, it will be entered into the payroll system for the net salary calculation process. The resulting net salary has adjusted taxes and other deductions.
c. Post-Payroll
Employee salaries are a significant expense for the company. Therefore, it is important for HRD to work closely with the finance team to manage payroll transactions during the payroll process.
Salary payments can be made to the company account with the help of the Finance team. In Indonesia, this salary payment is followed by the distribution of salary slips to each employee. It is also common to work with some payroll service to make the process more smooth.
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