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How to manage payroll for SME's

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Let's face the fact that employees work for their wages. Timely and accurate wage payment is the most critical part of an organisation as it motivates people and also reflects positively on the company. However, it is not an easy task for an SME to correctly calculate the salaries as it requires a number of computations - income tax, professional tax & provident fund deductions, HRA and other allowances. Then there is a multitude of statutory compliances which needs to be adhered to as per the timelines.

For small and medium enterprises (SMEs), this could be a little overwhelming. This short guide is intended to help SMEs manage their payroll effectively on a tight budget.

How to Manage Payroll for SMEs?

Well, to be honest, there is no shortcut if you wish to handle your payroll on your own. You will need to follow the basic steps in order to correctly calculate and disburse the salaries on time.

1. Figure out the gross salaries

The first step is the obvious one - you need to mention the gross salary of your employees (the amount you owe without deductions) in the excel sheet (if that is what you are using till now!)

For daily wagers, who work on hourly wages, multiply the total hours worked by the hourly wages. For regular employees, figure out the attendance against the leaves availed (if any) to arrive at the number of days they need to be paid for.

2. Deductions

You will need to deduct all the statutory deductions correctly as per the latest laws. Also, you can deduct any advances or unauthorized leaves at this step.

3. Payments

It is time you release the payments of your employees. If you are a very small team, you could either pay via cheque or use the direct bank transfer mode.

4. Deposit statutory payments to respective departments

All registered SMEs are required to deposit taxes to the respective government departments on time. In case of delay or default, you might have to bear heavy penalties. So, this step is extremely important where you will have to correctly deposit taxes to the government as per the deadlines.


If this sounds too complex to you, you might want to hire the right payroll agency that is capable of delivering customized solutions for your SME. Weavings is a top-notch staffing agency in India which is known for delivering exceptional staffing and payroll services in India.

 When it is the question of managing payroll, you have got to rely on the best staffing agency in India. Feel free to get in touch with our specialists today!

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