What is Payroll ? This is a question that many managers and business owners encounter when starting to build a human resources management system. Understanding Payroll and how to build a standard payroll not only helps businesses ensure employee benefits but also improve operational efficiency and optimize costs. In this article, 1C Vietnam will provide detailed instructions from basic concepts to implementation steps to help organizations manage Payroll in the most professional way.

1. What is Payroll? Elements needed in a complete Payroll

The term "Payroll" is currently commonly used in many companies and businesses in Vietnam. In Vietnamese, Payroll can be translated as payroll, salary book, or total salary budget.

Payroll not only lists the amount of money each employee receives after working time or completing tasks, but is also a record of payment information such as salary, wages, bonuses and deducted amounts. tax. A business can handle the payroll process itself or outsource payroll management.

A complete and accurate payroll needs the following information:

• List of employee information.
• Number of timekeeping sessions, vacations, overtime, and overtime work.
• Salary of each employee and additional income such as basic salary, performance bonus, KPIs bonus, sales bonus, allowances and subsidies.
• Deductions according to regulations such as social insurance (SI), personal income tax (PIT), fines or other deductions.

2. Main function of Payroll in businesses

Payroll or payroll, plays an important role in the operations of every business. This tool not only ensures salary payments to employees but also integrates many other management functions. Let's explore Payroll's main functions in detail in the section below.

2.1 Manage employee compensation and benefits

Based on the concept of what Payroll is , it can be defined as a tool used for the purpose of calculating each employee's salary based on the number of hours worked, basic salary, allowances and deductions. . Thanks to the information in Payroll, the human resources (HR) department can easily control and effectively manage employee salary costs and other personnel costs.

2.2 Legal basis for financial reporting and salary payment activities

Payroll plays an important role in building a business's financial statements due to its direct impact on cash flow and payable expenses. Information about salaries, allowances, taxes and deductions on Payroll provides important data to calculate and allocate costs to each department.

At the same time, Payroll ensures the legality of the salary calculation process, which is the basis for proper compliance with policies and legal regulations, avoiding salary disputes or legal liability. Therefore, building Payroll requires absolute precision and care.

2.3 Optimize human resources

If Payroll is calculated incorrectly or unfairly, employees may become disgruntled, dissatisfied with the business, and less productive. Therefore, the construction of Payroll needs to ensure fairness and transparency, and at the same time motivate and motivate employees by offering attractive salary increases, bonuses and income options.

3. Basis for building Payroll and completing periodic payroll

After clearly understanding what Payroll is and the role of this tool in businesses, in the next content 1C Vietnam will point out the necessary basis in the process of building Payroll. Let's find out now!

3.1. Laws

When building Payroll, legal regulations on wages are the most important factor to keep in mind. This item includes the regional minimum wage, regulations on deductions from salaries such as social insurance, health insurance, unemployment insurance, personal income tax and other regulations according to the Labor Code. Enterprises must fully comply with these regulations to ensure legality, fairness and transparency in the process of paying employees.

3.2 Salary regulations of the enterprise

Each business has its own salary regulations to ensure fairness and transparency in salary calculation, while minimizing disputes between employees and employers. Normally, salary regulations at businesses include the following basic contents:

• Principles and regulations on salary calculation: Methods, standards and procedures for calculating salary for employees.
• Principles and regulations on salary payment: Method, time, frequency and method of salary payment.
• Regulations on deductions and allowances: Deductions from salary such as personal income tax, social insurance, health insurance and allowances such as position, work, and seniority allowances.
• Other policies and regulations related to salary: Working time, overtime, leave regime, rewards and discipline.

3.3 Regional minimum wage

From July 1, 2022, according to Decree 90/2019/ND-CP, the regional minimum wage is prescribed as follows:

• Region I: 4,680,000 VND/month
• Region II: 4,160,000 VND/month
• Region III: 3,640,000 VND/month
• Region IV: 3,250,000 VND/month

3.4 Industry average salary

Usually, companies determine the actual salary much higher than the regional minimum wage. The average salary is agreed between the employee and the employer, based on experience, capacity, requirements of the position applied for as well as the average salary of that position in the labor market.

3.5 Monthly timesheet

Timesheets are an important tool for calculating salaries and evaluating employee performance. Timesheets provide information about working time, vacations, overtime, etc., helping managers calculate the wages and salaries of each employee. In addition, timesheets assist managers in monitoring and evaluating work performance, thereby making decisions on reward policies and handling violations of regulations in a reasonable and accurate manner. .

4. Some problems arise when calculating Payroll

During the payroll processing process, building Payroll and related policies can encounter many errors. Common errors include:

• Incorrect salary calculation due to gross salary not matching reality, lack of income such as KPI bonus, sales bonus, allowance, or incorrect personal income tax calculation.
• Lack of clarity in salary regulations and lack of transparency with employees. This leads to employee dissatisfaction and reduced engagement and effort at work.
• Developing non-specific reward regulations can cause discouragement and lack of motivation for employees.
• Other problems include late salary payments and time lost in the process of compiling and disbursing.
• Failure to establish salary increases based on rank, title, seniority and working capacity can lead to personnel bleeding.

5. Build and manage Payroll effectively with 1C:Company Management

In the current era, the development of advanced software has made timekeeping and payroll work in businesses become significantly more convenient. 1C:Company Management is proud to be one of the most effective comprehensive business management solutions today, which stands out with its diverse and flexible payroll features.

Specifically, the software supports managing all personnel information, from detailed information to salary levels, salary calculation formats, and work schedules. At the same time, 1C:Company Management also allows declaring multiple salaries; automatically calculate salary and insurance or benefits; Monitor public securities in a transparent and scientific manner.

In this article, 1C Vietnam has helped businesses learn about the concept of what Payroll is as well as how to build professional Payroll. Today, by applying appropriate processes and technology, businesses can ensure the accuracy and efficiency of the payroll process, while creating favorable conditions for sustainable development in the future. . If you have any questions related to 1C:Company Management software, please contact 1C Vietnam for advice.