Payroll System That Makes It Easy For Companies

Salary is an employee's basic right that must be fulfilled by the company.

In paying employee salaries need to take into account many things. If each system is not properly recorded, or not integrated, and messy, this will hinder the company's work.

Salary is an employee's basic right that must be fulfilled by the company. Therefore, it is necessary to find out what an effective employee payroll system looks like for your company.

Salary is the remuneration received by workers in the form of money based on working time from the company where they work. The company does not want errors in the payment of employee salaries.

Therefore, companies need a system that regulates income including employee payroll.

Salary is a periodic or periodic payment from employers providing employment to employees written in the employment contract. Salaries can be considered as a form of expenditure by entrepreneurs to obtain human resources.

The amount of salary depends on the provisions of the employer or company as well as negotiations from the employees themselves. As proof of salary provision, workers will receive a payslip containing details of receipt.

Every country has its own payroll system, Indonesia is no exception. In Indonesia, the provisions for the payroll system have been regulated in the Manpower Act. In general, the salary of an employee is measured based on the following things.

Group, applies to civil servants. Length of working. Skills. Understanding Payroll System

The payroll system is a system that regulates everything related to the process of paying employee salaries and filing job taxes.

For companies, this system is useful for tracking hours worked, withholding taxes, paying government job taxes.

Each pay period, the employer must calculate and distribute employee wages and is responsible for totaling employee hours worked and calculating employees' gross wages accurately.

Payroll systems are generally in the form of software that is used to enter the nominal wages and hours worked. The software will use the information to perform calculations and perform tax and insurance deductions.

Payroll system software is updated automatically when tax laws change. Companies need to do detailed planning of the entire payroll process.

There will always be work related ongoing tasks that require constant attention and monitoring.

For example on changes to withholding taxes, contributions, and other things that must be considered.

The Importance of Implementing a Payroll System in Companies

Payroll is part of the company's operations. It is not only a form of responsibility for employee salary compensation but also plays an important role in ensuring that the company complies with the existing tax laws.

Here are some reasons why the payroll system is important for companies:

1. More Efficient

Payroll system helps streamline the payroll process. The process of adding numbers manually, then entering the data and then calculating the taxes in the payroll stage is very time consuming.

With a special payroll system, companies can save more time on payroll so that your business can run more optimally.

2. Employee Satisfaction

The reason why companies need to implement a payroll system is because employees want to receive wages on time.

If the salary is late in the bank account, this can prevent them from meeting their daily needs. This can damage employee confidence in the company.

Late and inaccurate payments will cause employees to question the company's financial stability.

If the company implements a payroll system, the system will ensure that employees are paid the appropriate amount on time. Consistently paying on time will have an impact on employee morale.

This affects the environment and overall corporate culture, resulting in a positive attitude from employees. In this way, employee performance will be maximized.

3. The Company's Reputation Is Good

Companies must ensure that their payroll activities comply with tax and employment laws.

Following existing legislative laws and meeting tax obligations makes the company branded as a stable employer.

Increasing the company's reputation will ultimately attract and retain solid talent. There will be many job seekers and partners who are interested in joining your company.

4. Reporting Activities Made Easier

Companies need to report withholding taxes on salaries, payroll, and employee status to the government on a quarterly or annually basis.

Employer requirements often depend on the size of the employee's salary and the type of business you run.

Each country has labor laws regarding minimum wages, overtime, termination of employment, and others.

Payroll Regulations in Indonesia

The legal basis for payroll in Indonesia refers to PP No. 78 of 2015. Some important points that need to be known as an employer are:

Article 17 paragraph (1), wages must be paid to the workers concerned. Article 17 paragraph (2), employers are required to attach proof of payment of wages that include details of the wages concerned according to the time of payment. Article 18, the entrepreneur must pay according to the time agreed between the entrepreneur and the worker. Article 21, payment of wages using the prevailing rupiah currency. Salary System Applied in Indonesia

There are several basic salary calculation patterns that you need to know. Salary reflects the value of the employee's duties or workload.

If work productivity increases, salaries must potentially increase as well. However, salary increases are not permanent. In Indonesia, the payroll system is carried out using three methods, including:

1. Single Scale Payroll System

Single scale payroll system based on rank without considering the work responsibilities of the employees. So, every employee of the same rank or position has a salary that is not much different.

2. Dual Scale System

With this payroll system, employees are paid based on consideration of the type of work, amount of responsibility, and achievements. This system is considered very fair in the world of work.

3. Mixed System

The mixed payroll system is a method that is widely adopted by companies in Indonesia. This payroll system is confirmed in Law No. 43 of 1999 and in PP. 6 of 2008.

In its realization in the field, this system applies a combination of dual and mixed systems, where employees with the same rank are given the same salary. There are certain allowances if there are different burdens of responsibility.

This causes no gaps in basic salary among employees of the same rank and also does not cause injustice due to different workloads because there are allowances that support the performance and achievements of employees.

Factors that determine the amount of employee salaries

Determining the amount of employee salaries can not just guess. This has been regulated in Article 2 paragraph 1 of the Regulation of the Minister of Manpower No. 1 of 2017. In it, there are five factors that affect the amount of employee salaries, including:

1. Employee Term

The period of service is related to the experience of employees doing a job in a certain position. The longer the experience of an employee, the higher the value of the employee in the eyes of the company.

2. Group

Group is the result of grouping positions according to work weight, duties, and responsibilities. The group has an effect on the amount of salary and facilities enjoyed by the employee.

3. Employee Position

It refers to a collection of tasks and jobs with certain risks, responsibilities and difficulties. The higher the position, the greater the salary that the employee will receive.

4. Education

Business owners usually impose a formal education level as a condition for occupying a certain position for their employees. The level of education affects the amount of salary that will be received.

5. Competence

Each employee must have competencies such as knowledge, skills, and work ethic according to certain requirements. Business owners can give large salaries to employees who have competencies in certain positions.

Parties Involved in Payroll Management

The following are several parties who are fully involved in the employee payroll process:

1. HR Division

In payroll management, the HR department has the following tasks:

Recruit employees as needed Determine the position of employees who have been recruited Determine the amount of each employee Arrange promotions, demotions, dismissals, and transfers of employee positions Calculate the amount of salary and benefits for each employee 2. Finance Division

All data related to employee payroll will be submitted to the finance division. Based on the data, the finance department will process the payment of salaries and benefits on time.

3. Accounting Division

The inj division is in charge of executing salary payments according to procedures, for example writing cash checks, requesting approvals, and processing them to the bank.

After the payroll process, the accounting division will record and distribute labor costs in the company's books.

The management can find out how the company's financial condition every month.

Data Required During Payroll System

There are two types of data that must be present during the payroll system process, namely constant data and variable data.

1. Constant Data

The constant data does not change so it is only entered once at the beginning. This data changes when the employee submits the change. Constant data consists of:

Employee name Employee NPWP Amount of salary to be received by employee Marital status of employee Amount of non-taxable income BPJS Contribution (if any) Division where employee is currently working. Variable Data

Variable data will change every salary payment period. This data must be entered in the payroll system within a certain deadline. Variable data consists of:

Number of hours worked by employees Number of days off, or employee leave Days employee holidays Amount of cumulative income and tax deductions for each employee Good Payroll System Method

Each company has a different employee payroll system, some use excel or use special software. In general, this is the sequence of the system until the employee gets the prevailing salary in a company.

To calculate the wages of each employee, the HRD team will obtain constant data and variable data to be processed to determine the employee's income per person. The data is obtained from the performance assessment when the company uses a personnel application.

The HRD team will calculate the personal income tax (PPh 21) according to the employee's position status.

After that, they will get a recap of the revised payroll tax calculation from the tax department, and make a slip and a list of salaries received by all employees.

The wage calculation was then revised by the company's finance division. If there are no further errors, the HRD team makes a cash check containing the amount of the employee's salary and submits it to the company leadership for immediate processing.

The final step, the HRD team will do a cash check and transfer it to the payroll bank so that it can be transferred to the account of each employee who works at the company.

Money issues are very sensitive for everyone. Therefore, a payroll system was created to expedite the process of calculating and paying each employee's wages.

To calculate employee wages more practically and accurately, you can use software such as Talenta as your company's solution. Find out more about Talenta's products on Talenta's official website.