While payroll deals with compensating employees, human resources takes care of employee relations. Although the two departments have distinct roles in an organization, they also share functions that are crucial for the organization’s success. Integrating human resources and payroll can reduce paperwork, allows automatic updating and reduce difficulty in providing consolidated reports.
Payroll functions are covered by either the finance department or human resources department in most organizations. Essentially, payroll is number-driven and calls for knowledge of tax laws and accounting. Thus, many respondents believe it should be positioned with the finance department.
At the same time, payroll is also considered a function of HR because it pays and deals with people. Take, for example, maternity pay. The HR side is that the company must preserve the employee’s rights and abide by federal and state anti-discrimination and maternity laws. At the same time, the employee must receive compensation, a finance function, in accordance with the company’s policies.
Payroll is very important in the employee’s life in the organization.
But just how are their salaries computed?
1. Given their monthly rate (as it is stated in the job offers), to compute for their daily rate:
- Monthly rate multiplied by 12 and divided by 261 days (which is the number of working dates within the year not including weekends)
- For example, the employee receives 10,000 per month.
- (10,000 x 12 / 261) = 459.77
2. To compute for what they will receive on the 10th or the 25th of the month, it depends on the number of working days of the employee. Regular and legal holidays are with pay while special non-working ones offer no pay.
- For example, the employee has worked 9 days which is equivalent to 72 hours.
- 459.77 x 9 = 4137.93
