Why do you need payroll service provider?

Multi State compliance is a common issue with payroll service providers. Processing the benefits and payroll services at a same time becomes critical because each employee has its own record. Compliance is the rules, regulations or standards a company need to follow defined by Ministry of Labor and Employment and state. Companies face multi-state compliance issues when their employees cross state lines for their jobs or have multi state operations.

There is also an issue of minimum wage difference. Wage varies widely from one state to another. Ministry laws do not preempt state laws so that in many cases employees need to pay tax in both states on the same income. During payroll processing, they cannot apply same strategy for all employees.

Overtime is paid 1.5 times more than the standard pay for hours worked beyond 40 hours in a single week. Some states do overtime calculations on daily basis setting 8 hour as benchmark. Overtime compensations are pre-empted by laws of employees who have salaries greater than certain threshold. All the deductions, state income tax withholding or application of income tax to residents or non residents are also vary by state

Special payroll tax issues may apply to non resident employees who work in one state and live in another. Some states may have reciprocal agreements with certain states, simplifying withholding tax guidelines as income will be taxed in only one state.

State laws vary when it comes to defining liability for withholding taxes. These are some conditions need to be met for a company becomes liable for state withholding:

* The company is doing business in the state.

* The employer pays wages to at least one person in this location for services rendered.

* The company derives some form of income from this state.

* The business maintains a physical address in the state.

Payroll Outsourcing

Outsourcing payroll services to a third party that specializes in this function simplifies the procedure for employers while ensuring compliance with state and ministry laws.

Preferably, the payroll management companies must have local and global expertise aside from providing a comprehensive suite of services to cover payroll services in India, payroll tax payments and overall payroll processing. Compliance with ministry, state and local tax jurisdictions should be integrated into the service package. Delhi based Brooks Consultancy Private Limited process according to your needs and streamlines administration of these services to ensure compliance in every state where your business operates.