How to Calculate Payroll – Calculation of employee payroll errors can occur in the calculation. Ensuring accurate and timely payment of wages is first and foremost important. If salaries are not paid properly or there is a delay in issuing salaries, it can damage employee performance and ultimately affect productivity in your business.
Knowing how to calculate the correct and appropriate payroll is the most prioritized.
Below is information on how to calculate employee salaries in accordance with labor regulations/laws and regulations that apply to the company.
What is payroll?
Payroll is the process of paying employee wages. Employers must handle payroll for each pay period so that employees receive their wages accordingly. The payroll process is more difficult than just giving a salary. There are many component parts that need to be known from both the employee and employer sides, such as collecting employee working hours, calculating taxes and other deductions, distributing salaries, and reporting and sending taxes and other deductions to the right party (agency/government).
Payroll calculation method?
1. Net salary method
Net salary is a salary calculation method with taxes borne by the company. The wages received by employees have been subject to deductions such as income tax, employment insurance and other contributions. So that the salary received by employees is the net salary that has been calculated with the existing deductions.
2. Gross salary method
Gross pay is a method of withholding tax in which the employee must bear the amount of his own income tax. In essence, broadly speaking, the difference between net and gross salaries lies in the position of the insurer. If companies apply net wages, they are obligated to deduct employee wages and contributions. Meanwhile, with a gross salary, it is the employee who is responsible for his income tax.
3. Gross-up salary method
Is a tax deduction method in which the company provides tax allowances that are the same amount as the amount of tax withheld from employees.
Components of salary calculation deductions?
1. Social & security BPJS
Workers are required to become Social & Security BPJS participants whose benefits include Work Accident Benefits (JKK), Death Benefits (JKM), Old Age Benefits (JHT), Pension Benefits (JP), and Job Loss Benefits (JKP).
> Work accident insurance (JKK)
The JKK contribution is fully borne by the company and is adjusted to the level of work risk. The amount of JKK contributions per month according to PP No 44 of 2015 is:
– Very low risk: 0.24% of salary
– Low: 0.54% of salary
– Moderate: 0.89% of salary
– High: 1.27% of salary
– Very high: 1.74% of salary
> Death guarantee (JKM)
Death Benefit is a Social & Security BPJS life insurance program that provides cash benefits to the heirs of active participants who die not due to work accidents.
Same with JKK, JKM contributions are fully borne by the employer every month. The amount of JKM contributions according to Government Regulation No. 44 of 2015 is 0.30% of the employee’s salary.
> Old age guarantee (JHT)
The Old Age Security is an old age protection program in the form of cash which can be disbursed all at once when the participant reaches retirement age (including stopping work due to layoffs or resigning), experiences permanent total disability, or dies.
BPJS Employee JHT contributions are set by PP No 46 of 2015 at 5.7% of salary with the following provisions:
– 3.7% borne by the employer;
– 2% is borne by workers
> Pension guarantee (JP)
Like JHT, Social & Security BPJS JP contributions are also paid by companies and workers with different amounts. The Employment BPJS Pension Guarantee contribution paid by the employer is 2 percent of a month’s wages. Meanwhile, workers participate in paying contributions of 1 percent of a month’s wages (Social & Security BPJS deduction from salary).
2. Health BPJS
BPJS Health 2023 contributions, it also refers to Presidential Regulation Number 64 of 2020 concerning the Second Amendment to Presidential Regulation Number 64 of 2020 concerning the Second Amendment to Presidential Decree Number 82 of 2018 concerning Health Insurance, that contributions are determined based on the type of participation of each participant in the JKN program.
For PPU Participants (Wage Receiving Workers) or formal workers both state officials such as ASN, TNI, POLRI and private workers, the contribution rate is 5% of wages, with details of 4% paid by the employer and 1% by the worker.
3. PPh 21
What is Article 21 income tax? Income tax 21 is a tax that must be imposed on both individuals and entities that have income.
Regulations related to Income Tax 21 have been regulated in Law Number 36 of 2008 and Director General of Taxes Regulation Number Per-32/PJ/2015.
Meanwhile, the tax rate 21 is adjusted to several things such as basic salary, benefits, non-taxable income, and so on that are included in the final tax calculation.
> Components of Other Employee Salary Deductions
– Employee Debt
– Overpaid Salary
– Company Compensation
– Cut, Due to Unpaid Leave
This is information related to salary calculations. With Payroll Calculation, you can calculate employee salaries more accurately, adjust each component in the company and follow applicable regulations.
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