Question 1

How is the payroll structure created?

Accepted Answer

Before creating a salary structure, consider defining the value of every position in your company, analyzing your company’s competitive standing, and also predefining a salary increase rate when compared to market rates. Develop a pay structure based on the information gathered from the market analysis of salary ranges.

Question 2

What are the components of the payroll structure?

Accepted Answer

The major components of a payroll structure ideally include gross salary, deductions, provident fund, professional tax, Employee State Insurance Corporation, and labor welfare fund.

Question 3

What are the three types of salary structures?

Accepted Answer

The three types of salary structures are traditional, broadband, and market-based. The most commonly used of the lot is the market-based structure, and broadband is the least used.

Question 4

What constitutes salary in Indian payroll processing?

Accepted Answer

The two main components that constitute salary in Indian payroll processing are fixed and dynamic or variable. The fixed changes are only on annual revision or based on performance. Dynamic pay is what gets paid on a quarterly, half-yearly, or annual depending on the overall company or department performance.

Question 5

What are the types of payroll systems?

Accepted Answer

The three types of payroll systems are manual, in-house computerized, and outsourced systems.

Question 6

What Is Payroll Processing Cycle?

Accepted Answer

Payroll processing is the procedure of calculating and distributing employee salaries that include earnings, taxes, benefits, etc.

Question 7

How Often Should Payroll Records Be Updated or Audited?

Accepted Answer

Payroll records should ideally be updated when there is a change or modification, like the recruitment of a new hire, a change in employee information, a salary hike, etc.

payroll structure

Payroll Structure in India – Components, Types & Benefits

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