Payroll Management

1. Payroll

It is a well-known fact that paying employees accurately and maintaining compliance with the relevant legal departments can be a challenging task. While you focus on achieving your business’s mission and vision, why get bogged down by tasks like payroll? Let us take care of your payroll needs and ensure that your records are maintained properly. We can assist you with payroll processing, employee payments, and handling statutory requirements, including filing the necessary returns on time.

With over 10 years of experience in payroll management, our team can provide you with much-needed relief from all manpower-related issues, allowing you to fully concentrate on growing your business and other high-priority activities without the constraints of manpower limitations.

Our Services Include:

  • Structuring employee salaries
  • Processing monthly payroll and generating pay slips (emailed to employees)
  • Facilitating direct deposit of salaries into employee bank accounts
  • Remitting monthly tax deductions to the appropriate authorities
  • E-filing of TDS returns and other statutory filings
  • Providing MIS reports
  • Preparing year-end salary certificates
  • Tax consultation

2. Form 16

Form 16 is a certificate issued by an employer to all of his employees for a specific financial year, reflecting the total salary paid and the amount of tax deducted at source (TDS) during that year. For salaried employees, Form 16 is crucial from an income-tax perspective, as it forms the foundation of their income tax return.

The purpose of this article is to draw the attention of salaried employees who have either already received or are yet to receive their Form 16 for the financial year. The following points are noteworthy in this regard:

Contents of Form 16 – Part A

Part A of Form 16 serves as the TDS certificate issued by your employer. It details the total salary paid to you during the year, along with the amount of tax deducted and deposited by your employer with the Indian Government Treasury. However, this certificate is valid only if it includes the following details:

  • Heading: Certificate under Section 203 of the Income Tax Act, 1961, for tax deducted at source on salary
  • Certificate number
  • Your name and address and those of your employer
  • Your Permanent Account Number (PAN) and that of your employer
  • Tax Deduction Number (TAN) of your employer
  • Range of Commissioner of Income Tax (TDS)
  • Assessment year
  • Period for which the certificate applies
  • Quarter-wise details: Amount paid to you, receipt numbers of quarterly TDS returns filed by your employer, and the TDS amount deducted and deposited by your employer in your name
  • BSR code of the bank branch: Date on which TDS was deposited, and the Challan serial number related to each TDS payment made by your employer
  • Status of matching with OLTAS: It should show as ‘F’ (final). If it reflects ‘U’ (unmatched), inform your employer immediately, as the appropriate credit may not be available to you
  • Verification details of the employer
  • Digital or manual signature: All pages of Part A should be digitally signed by the employer. If not digitally signed, they must at least be manually signed by the employer

Contents of Form 16 – Part B

Part B of Form 16 is usually an annexure to Part A. It provides detailed information about your salary components, the taxability of those components, and the total tax payable by you for the year, against which TDS has been deducted and deposited by your employer. The contents of Part B include:

  • Gross salary
  • Exempted allowances under Section 10 of the Income Tax Act: For example, conveyance allowance, house rent allowance, medical allowance, children’s education and hostel expenditure allowance, etc.
  • Deductions allowable from salary income: For example, entertainment allowance and professional tax
  • Total income chargeable under the head ‘Salaries’ based on the above figures
  • Any other taxable income, provided you have reported it to your employer
  • Tax-saving deductions you are eligible for, such as PPF, LIC, Mediclaim, interest on an education loan, etc., provided these have been reported to your employer
  • Tax payable on total income: This is the amount of TDS that the employer has deducted from your salary. However, if the TDS deducted is either excessive or insufficient, the excess amount can be claimed when filing your return, and any shortfall should be paid by you at the time of filing
  • Verification details of the employer

3. Payroll Audit

We conduct payroll audit services across a variety of industries to ensure that employers are making proper contributions as required by their collective bargaining agreements.

Benefits of Payroll Audits and Compliance Programs

At MKTS, our payroll audit program and procedures are adaptable to meet each client’s unique needs. We customize our approach based on a thorough understanding of each plan’s specific requirements.

Payroll compliance programs assist plan trustees by:

  • Determining whether the plan is receiving the correct amount of employer contributions
  • Verifying that the plan has accurate and complete participant records
  • Providing employees with assurance that contribution payments are being carefully monitored

Making the Gray Areas Transparent

Employer contributions are often not straightforward. We ensure that employers remit the appropriate amount of contributions for the employees they report. Additionally, we assess whether there are other employees on the company’s payroll whom the employer has failed to include in their contributions. While necessary for compliance, payroll audits can result in significant financial differences—sometimes amounting to thousands of dollars.