Payroll Management System is a tool – basically a software program – that enables you to monitor your employee’s financial records in a hassle-free and automated way. This includes salaries, bonuses & deductions, net-pay, and pay-slip generation for a specific period.

Why do you need Payroll for your business?

If we broadly divide business functions in an organization it can be divided into two categories – macro & micro.

Macro functions are primary and long-term functions in an organization such as Business Development, Sales, Revenue, Cash Flow, etc.. all such tasks fall under the Macro category.

Micro functions can be referred to as day to day administrative chores of a business. These functions can be repetitive but they are as important as Macro functions to keep a business running.

“By having a payroll on place, we are automating a few of those micro functions so that we can focus on the macro part of our business”.

A payroll management system saves us from manually handling all payroll related functions such as the generation of pay-slips, tax-deduction calculation, etc..

Key benefits of having a Payroll Management System

  1. Employee Morale Boost

          If you make sure that your employees get paid on time and systematically, in a way you are winning their trust in your business’s financial integrity. This will boost your employee’s morale and motivate them to perform better.

2. Statutory Compliances

This is a legal framework decided by the government which shall be followed by every business in order to avoid hefty penalties and fines. Every organization that hires employees and pays them, all the payments and its related functions must comply with labour laws. A payroll process can help you automatically complying with updated employment and labour laws in the country.

3. Efficient Management of Information

          You will be able to efficiently manage and store your employee’s information in a single place, eliminates the need for having separate tools for managing the data.

4. Report Generation (Attendance, Salary, etc.)

          A decent payroll system will facilitate this process easily, this can be extremely important if you are looking for specific information about a specific employee.

5. Time-Saving

          All the payroll systems are fully automated, you’ll be saving a lot of time. Now you are not required to enter every piece of information manually. All you have to do is set-up the software and it’ll handle the rest. The only thing that you’ll probably do is employee registration on every new hire.

6. Plan for the future

          Most of the payroll management services offer a forecast option that can help you in administering how you can accommodate your business expenses and still operate profitably.

Calculation of Payroll in India

Calculation of Payroll in India is complicated, there are many factors that must be kept in mind while calculating Payroll. This mainly consists of four main components: basic pay, gross pay, deductions & net pay.

CTC = Gross Pay + PF + Gratuity

Basic pay is the fixed income of the individual. It’s fixed and constitutes 50% of the gross salary.

Gross Pay is the sum of the basic pay and other allowances before tax and other deductions.

Gross Pay = Basic Pay + HRA + other allowances

There are a few mandatory deductions. Deductions include income tax, PT, ESI, and EPF.

Therefore, Net Pay = Gross Salary – Deductions


Hence, as a business owner, it’s very difficult to manage payroll functions on your own. A payroll management system can help you with all payroll functions.

So, if you are looking for a payroll outsourcing company in India, We at People Skills, we are one of the best payroll outsourcing companies in India.

We will be pleased to help you with payroll outsourcing services for your business. Get in touch with us at or visit at