Hi Malini,
I have a query about salary payments. I'm working in a startup company, and sometimes there are delays in salary payments. I don't want employees to wait for their salaries, so I suggested to my management to pay salaries twice a month, on the 3rd and 17th of every month. If this is approved, how can I reflect this on their payslips since we make payments through the bank? Can I send the cheques to the bank twice for the salaries?
I would like to know if there would be any issues for the company or HR in implementing this practice, even if it's only for a temporary period.
Thank you.
Regards,
Malini G
From India, Hyderabad
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I have a query about salary payments. I'm working in a startup company, and sometimes there are delays in salary payments. I don't want employees to wait for their salaries, so I suggested to my management to pay salaries twice a month, on the 3rd and 17th of every month. If this is approved, how can I reflect this on their payslips since we make payments through the bank? Can I send the cheques to the bank twice for the salaries?
I would like to know if there would be any issues for the company or HR in implementing this practice, even if it's only for a temporary period.
Thank you.
Regards,
Malini G
From India, Hyderabad
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Hello Malini,
Think about how you will show the deductions like PF, ESI, PT twice a month. It will complicate your statutory formalities. It is also questionable whether your bank will accept salary twice a month. Instead, you may fix a particular date, say 7th or 10th of every month for salaries. I don't think salary twice a month is advisable. Let us wait for the seniors' comments in this regard.
Regards,
Vaishalee Parkhi
From India, Pune
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179Think about how you will show the deductions like PF, ESI, PT twice a month. It will complicate your statutory formalities. It is also questionable whether your bank will accept salary twice a month. Instead, you may fix a particular date, say 7th or 10th of every month for salaries. I don't think salary twice a month is advisable. Let us wait for the seniors' comments in this regard.
Regards,
Vaishalee Parkhi
From India, Pune
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Hi Malini,
I agree with Vaishali; however, you may consider changing the attendance and salary cycle to allow more time for salary preparation and fund transfers. Another option could be to split payments by grade into two parts, with the first part due before the 10th to ensure time for other statutory formalities. Additionally, the payment cycle could be for the previous month.
Please let me know if any corrections are needed.
Regards,
Hardik
From India, Pune
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I agree with Vaishali; however, you may consider changing the attendance and salary cycle to allow more time for salary preparation and fund transfers. Another option could be to split payments by grade into two parts, with the first part due before the 10th to ensure time for other statutory formalities. Additionally, the payment cycle could be for the previous month.
Please let me know if any corrections are needed.
Regards,
Hardik
From India, Pune
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Dear Malini,
The same thing happened in my company too, and we did the following:
1. During the recession, the salary of middle & top management was released in two terms – 75% on the 7th and 25% on the 25th of the month, but the salary slip was generated only on the 7th.
2. Currently, salaries up to 12K are released on the 7th, and amounts above that are released on the 10th of every month. Additionally, all allowances (which are not shown in the salary slip but are counted in CTC) are released on the 25th of every month.
You can also follow the same process.
From India, Pune
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The same thing happened in my company too, and we did the following:
1. During the recession, the salary of middle & top management was released in two terms – 75% on the 7th and 25% on the 25th of the month, but the salary slip was generated only on the 7th.
2. Currently, salaries up to 12K are released on the 7th, and amounts above that are released on the 10th of every month. Additionally, all allowances (which are not shown in the salary slip but are counted in CTC) are released on the 25th of every month.
You can also follow the same process.
From India, Pune
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You can make lumpsum advances cadrewise and the same advances can be recovered fully in the salary. Pon
From India, Lucknow
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From India, Lucknow
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Dear Malini,
You can make fortnightly payments to all the employees. After making the payment, you have to create a consolidated summary of their salaries and prepare your PF Remittance Details, ESI Remittance Details, and Professional Tax as per the attached sheet.
From India, Kumbakonam
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You can make fortnightly payments to all the employees. After making the payment, you have to create a consolidated summary of their salaries and prepare your PF Remittance Details, ESI Remittance Details, and Professional Tax as per the attached sheet.
From India, Kumbakonam
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Dear Malini,
What I can make out is that the above problem occurs mainly due to a couple of reasons:
1) Attendance Issue: Your salary may be getting delayed due to the collating of attendance, which at times is a huge task (when you don't have attendance software) or if no cut-out period is set for attendance.
Solution: You need to introduce the attendance cut-out period. For example, let's assume that the salary payment date is the last working day of every month. Let's take July 11-month salary. Collate attendance data (on 21st July 11) for the month of July for the period 1st July to 20th July (consider 20th as the cut-off date). Process the salary for the whole month and pay the next 10 days considering them as fully present. Adjust the leave data of July (period 21st Jul - 30th Jul) in the following month pay cycle.
This will give you a time of 10 days to collate & process salary, which is more than sufficient to process any headcount salary for any organization.
2) Due to Funds: At times, the salary payment gets held up due to a delay in arranging funds.
Solution: You need to introduce a process of intimating the tentative payout cost details. You should intimate the cost details to the Finance/Treasury team 2-3 days before the actual salary payment day.
Do look into this process in your organization and see if this helps.
Regards,
RB
From India, Pune
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What I can make out is that the above problem occurs mainly due to a couple of reasons:
1) Attendance Issue: Your salary may be getting delayed due to the collating of attendance, which at times is a huge task (when you don't have attendance software) or if no cut-out period is set for attendance.
Solution: You need to introduce the attendance cut-out period. For example, let's assume that the salary payment date is the last working day of every month. Let's take July 11-month salary. Collate attendance data (on 21st July 11) for the month of July for the period 1st July to 20th July (consider 20th as the cut-off date). Process the salary for the whole month and pay the next 10 days considering them as fully present. Adjust the leave data of July (period 21st Jul - 30th Jul) in the following month pay cycle.
This will give you a time of 10 days to collate & process salary, which is more than sufficient to process any headcount salary for any organization.
2) Due to Funds: At times, the salary payment gets held up due to a delay in arranging funds.
Solution: You need to introduce a process of intimating the tentative payout cost details. You should intimate the cost details to the Finance/Treasury team 2-3 days before the actual salary payment day.
Do look into this process in your organization and see if this helps.
Regards,
RB
From India, Pune
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Dear Malini,
My suggestion would be to calculate their actual salary, including statutory deductions, and then divide the net salary into two installments for payment. This approach can help avoid any statutory-related issues.
Regards,
Suresh
From Spain
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My suggestion would be to calculate their actual salary, including statutory deductions, and then divide the net salary into two installments for payment. This approach can help avoid any statutory-related issues.
Regards,
Suresh
From Spain
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Dear Malini: You can give 50% of salary as advance on 7th and salary on 15th of the month after deducting the advance. This may be a way to solve your problem. Regards.
From Bangladesh
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From Bangladesh
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Hi all,
I am working in engineering; it's been running for a long time, but there has been no HR person in this company. I have started here initially. What things should I do in this company? Please help to improve the HR area in this particular area.
Kindly help,
Mangala Dabke
From India, Mumbai
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I am working in engineering; it's been running for a long time, but there has been no HR person in this company. I have started here initially. What things should I do in this company? Please help to improve the HR area in this particular area.
Kindly help,
Mangala Dabke
From India, Mumbai
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First, you have to segregate employees' payroll into (1) coming under TDS and (2) not coming under TDS.
Payroll should be completed with respect to final disbursement, and the amount credited to each employee's personal account as due to them. By doing this, you have fulfilled the statutory requirements of PF, ESIC, TDS, etc.
So, your first priority is to pay those deductions into the Government Account. The Government does not bother whether the employee gets their money or not, but timely payment is the only thing counted by them to levy a penalty.
Secondly, decide when funds would be available for the payment of these and in what proportion, then pay them into their bank account or in cash as the case may be on different dates.
I would suggest that a proportionate payment on every 27th or 28th of each month goes into the employee's account as they have to run their family and meet expenses.
Because with the trend on the 1st of each month, each one will stand at the door of the employees for their money like milk, newspapers, etc.
If you delay the salary, not only will your company suffer from financial crunch and liquidity, but each employee will also undergo mental torture by the Home Minister and also the people they have to answer to.
Always think of the end-user and how it would help them in their needs.
Regards,
Ram
From Saudi Arabia
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Payroll should be completed with respect to final disbursement, and the amount credited to each employee's personal account as due to them. By doing this, you have fulfilled the statutory requirements of PF, ESIC, TDS, etc.
So, your first priority is to pay those deductions into the Government Account. The Government does not bother whether the employee gets their money or not, but timely payment is the only thing counted by them to levy a penalty.
Secondly, decide when funds would be available for the payment of these and in what proportion, then pay them into their bank account or in cash as the case may be on different dates.
I would suggest that a proportionate payment on every 27th or 28th of each month goes into the employee's account as they have to run their family and meet expenses.
Because with the trend on the 1st of each month, each one will stand at the door of the employees for their money like milk, newspapers, etc.
If you delay the salary, not only will your company suffer from financial crunch and liquidity, but each employee will also undergo mental torture by the Home Minister and also the people they have to answer to.
Always think of the end-user and how it would help them in their needs.
Regards,
Ram
From Saudi Arabia
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Starting an HR department from scratch requires patience and initiative, and you have to do it in a completely confidential manner. Otherwise, instead of cooperation, you will create doubts in the minds of employees.
Firstly, start by collecting the company's details, information about their directors, and employees. Next, format a form to gather all employee details such as name, father's name, date of birth, gender (M/F), marital status, qualifications, experience, previous company details, family and children information, emergency contact details, telephone numbers, mobile numbers, and other relevant contacts.
For the second point, begin by obtaining copies of their CVs, extracting the relevant information into your files, and compiling the data yourself to understand your requirements better.
Now, move on to their salary particulars, starting from their joining date, increments received, and their current salary. Also, document the position they initially joined in and their current position, whether through experience or additional qualifications.
Once all the necessary details are gathered and recorded, it's time to address the company policies:
a. Clarify the company's policies on leave, vacations, leave travel, and other benefits.
b. Define the company's policy on increments; implementing a system of yearly increments is beneficial as employees anticipate salary increases.
c. Discuss bonus policies.
d. Outline various leave types like casual leave, sick leave, and privilege leave.
e. Work on balancing and designing a system for casual and privilege leaves to ensure smooth operations even in the absence of an employee.
Moving on to operations:
Ensure proper employee allocation to each job to avoid disruptions in case of sudden absences. Discuss with department heads about their departments, challenges faced, and strategies for handling employee absences effectively.
Overall, the HR head should be approachable, prioritize employee welfare, and ensure the company's seamless operation.
With Regards,
Ram
From Saudi Arabia
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Firstly, start by collecting the company's details, information about their directors, and employees. Next, format a form to gather all employee details such as name, father's name, date of birth, gender (M/F), marital status, qualifications, experience, previous company details, family and children information, emergency contact details, telephone numbers, mobile numbers, and other relevant contacts.
For the second point, begin by obtaining copies of their CVs, extracting the relevant information into your files, and compiling the data yourself to understand your requirements better.
Now, move on to their salary particulars, starting from their joining date, increments received, and their current salary. Also, document the position they initially joined in and their current position, whether through experience or additional qualifications.
Once all the necessary details are gathered and recorded, it's time to address the company policies:
a. Clarify the company's policies on leave, vacations, leave travel, and other benefits.
b. Define the company's policy on increments; implementing a system of yearly increments is beneficial as employees anticipate salary increases.
c. Discuss bonus policies.
d. Outline various leave types like casual leave, sick leave, and privilege leave.
e. Work on balancing and designing a system for casual and privilege leaves to ensure smooth operations even in the absence of an employee.
Moving on to operations:
Ensure proper employee allocation to each job to avoid disruptions in case of sudden absences. Discuss with department heads about their departments, challenges faced, and strategies for handling employee absences effectively.
Overall, the HR head should be approachable, prioritize employee welfare, and ensure the company's seamless operation.
With Regards,
Ram
From Saudi Arabia
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Dear Malini,
Please prepare the salary statement and the salary slip once a month. Do not prepare two salary statements and two salary slips as it may lead to statutory compliance issues. However, if you are unable to pay the salary in one go, you can always send two cheques to the bank at intervals. Normally, the bank will not have any problems. There is only one constraint related to the payment date as per the Payment of Wages Act. In case of any delays, post a notice on the notice board regarding the salary delay. I trust that any doubts you had have been clarified.
Shivaswamy I.K
9620227995
From India, Bangalore
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Please prepare the salary statement and the salary slip once a month. Do not prepare two salary statements and two salary slips as it may lead to statutory compliance issues. However, if you are unable to pay the salary in one go, you can always send two cheques to the bank at intervals. Normally, the bank will not have any problems. There is only one constraint related to the payment date as per the Payment of Wages Act. In case of any delays, post a notice on the notice board regarding the salary delay. I trust that any doubts you had have been clarified.
Shivaswamy I.K
9620227995
From India, Bangalore
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Dear Malini,
I support what S. Bhaskar stated. You can provide a salary slip once a month, but make salary payments every two months. There are no legal hurdles in doing the same. However, this process will be very cumbersome and also very tiring.
Regards,
Octavious
From India, Mumbai
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I support what S. Bhaskar stated. You can provide a salary slip once a month, but make salary payments every two months. There are no legal hurdles in doing the same. However, this process will be very cumbersome and also very tiring.
Regards,
Octavious
From India, Mumbai
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Thank you, Mr. Octavious. I have been providing fortnightly payments to all my employees through bank transfers via Corporation Bank in Hyderabad. For the remittance of PF, I aggregate the basic wages of each employee to determine the PF amount. The paysheet is created in an Excel sheet, and the payslip can be prepared manually or through mail merge in MS Word format.
Dear Malini, I agree with what S. Bhaskar mentioned. You can issue salary slips monthly while making salary payments every two months. There are no legal obstacles to this approach. However, this process can be quite cumbersome and exhausting.
Regards,
Octavious
From India, Kumbakonam
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Dear Malini, I agree with what S. Bhaskar mentioned. You can issue salary slips monthly while making salary payments every two months. There are no legal obstacles to this approach. However, this process can be quite cumbersome and exhausting.
Regards,
Octavious
From India, Kumbakonam
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Thank you, Mr. Octavious.
I have provided fortnightly payments to all my employees through bank transfers (Corporation Bank in Hyderabad). For PF remittance, I used to consolidate the basic wages of each employee to determine the amount to be paid for PF.
Dear Malini,
Paysheets will be created in Excel, and payslips can be prepared manually or using mail merge in MS Word format. Even in the event of an inspection by ESI or PF authorities, you can easily explain that the fortnightly payment arrangement was made to facilitate the employees.
"I support what S. Bhaskar stated. You can provide salary slips once a month but make salary payments every two months. There are no legal hurdles in doing so. However, this process will be very cumbersome and tiring.
Regards,
Octavious"
From India, Kumbakonam
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I have provided fortnightly payments to all my employees through bank transfers (Corporation Bank in Hyderabad). For PF remittance, I used to consolidate the basic wages of each employee to determine the amount to be paid for PF.
Dear Malini,
Paysheets will be created in Excel, and payslips can be prepared manually or using mail merge in MS Word format. Even in the event of an inspection by ESI or PF authorities, you can easily explain that the fortnightly payment arrangement was made to facilitate the employees.
"I support what S. Bhaskar stated. You can provide salary slips once a month but make salary payments every two months. There are no legal hurdles in doing so. However, this process will be very cumbersome and tiring.
Regards,
Octavious"
From India, Kumbakonam
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The reason for the above subject by organizations is either to evade tax or to guide against cash flow problems by paying twice. The first salary is paid on the 14th of the month, and the second one around the 24th of the same month. On the payroll spreadsheets, both will carry half of the allowances, deductions (e.g., pension and PAYE deductions, etc.). Your organization will either have to pay through different banks or pay into a single bank with different company names, one as the parent company and the other as the subsidiary company. This will also motivate employees at any point in time since money will not be scarce in their accounts. The computation on the payslip is never a problem because all the allowances and deductions will be computed together on one payslip issued at the second salary payment.
I hope this meets your request.
Best regards,
Fola
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I hope this meets your request.
Best regards,
Fola
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Dear all,
My company also makes salary payments twice a month, on the 5th and 25th of each month. On the 5th, employees receive their basic salary, which remains fixed every month. On the 25th, the company pays incentives. In fact, everybody agrees with this policy.
I am happy to share our experience.
Thao - from Vietnam
From Vietnam, Hanoi
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My company also makes salary payments twice a month, on the 5th and 25th of each month. On the 5th, employees receive their basic salary, which remains fixed every month. On the 25th, the company pays incentives. In fact, everybody agrees with this policy.
I am happy to share our experience.
Thao - from Vietnam
From Vietnam, Hanoi
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Your problem seems to be a financial one. Your company is not able to arrange funds to pay the salary of all employees in one go. But arranging it in two installments seems to be a solution.
One simple solution is to pay part of the salary as a salary advance on the 15th of every month. This can be paid through the bank; there is no problem. You need not deduct and pay any statutory contributions on this advance payment.
At the end of the month, calculate salary and deductions for the entire month as usual, also deduct the salary advance paid on the 15th from the monthly salary. Let this deduction reflect in the payslip as well.
Hi, I have a query on salary payment. I'm working in a startup company, sometimes there are delays in salary payments, and I don't want employees waiting for their salaries. So, I suggested to my management to make their salaries twice a month (3rd and 17th of every month). If yes, then how can I show this on their payslips, and we do payments by bank, so can I send cheques twice to the bank towards salaries? I want to know whether there will be any problem for the company/HR in following these practices (this will be only for some time).
Thank you,
Regards,
Malini G
From India, Pune
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One simple solution is to pay part of the salary as a salary advance on the 15th of every month. This can be paid through the bank; there is no problem. You need not deduct and pay any statutory contributions on this advance payment.
At the end of the month, calculate salary and deductions for the entire month as usual, also deduct the salary advance paid on the 15th from the monthly salary. Let this deduction reflect in the payslip as well.
Hi, I have a query on salary payment. I'm working in a startup company, sometimes there are delays in salary payments, and I don't want employees waiting for their salaries. So, I suggested to my management to make their salaries twice a month (3rd and 17th of every month). If yes, then how can I show this on their payslips, and we do payments by bank, so can I send cheques twice to the bank towards salaries? I want to know whether there will be any problem for the company/HR in following these practices (this will be only for some time).
Thank you,
Regards,
Malini G
From India, Pune
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I think the suggestion of Mr.Suresh.K is correct and workable. There is less confusion but convenient for the circumstances explained by Malini.K. kumar.s Bg
From India, Bangalore
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From India, Bangalore
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Hi Malini,
I don't suggest you make the salary twice a month. It would be good if you suggest to your management to finalize one particular date for the release of salary. It's better to establish this practice now as it may become challenging as the company grows and the employee strength increases.
From India
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I don't suggest you make the salary twice a month. It would be good if you suggest to your management to finalize one particular date for the release of salary. It's better to establish this practice now as it may become challenging as the company grows and the employee strength increases.
From India
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Dear Malini,
"You can give 50% of the salary as an advance on the 7th and the remaining salary on the 15th of the month after deducting the advance. This may be a way to solve your problem." This is a good suggestion, I think :). Thanks Akjamee for sharing!
From Vietnam, Ho Chi Minh City
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"You can give 50% of the salary as an advance on the 7th and the remaining salary on the 15th of the month after deducting the advance. This may be a way to solve your problem." This is a good suggestion, I think :). Thanks Akjamee for sharing!
From Vietnam, Ho Chi Minh City
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"You can give 50% of the salary as an advance on the 7th and the remaining salary on the 15th of the month after deducting the advance. This may be a way to solve your problem. This is a good suggestion, I think :). Thanks, Akjamee, for sharing!
This definitely looks like the best suggestion, but can it attract any legal issues?"
From India, Vadodara
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This definitely looks like the best suggestion, but can it attract any legal issues?"
From India, Vadodara
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