HR software is an invaluable tool for organizations, and the right software will improve the overall employee experience. It can save HR professionals as much as 40% of their time each week by assisting with employee records.
The best HR software can allow employees to access and manage their employment records from anywhere without having to worry about data breaches. Some software applications even allow other HR functionality, including applicant tracking, automated onboarding, employee self-service, time & attendance, paid time off tracking, and custom reporting.
Many of these systems are also integrated with payroll software, enabling users to easily input employee hours and view cash requirements before payroll submission. Not only can it help you manage your employees and payroll, but it can also improve your decision-making.
Whether you are a small or large enterprise in the Philippines, HR software can make your life easier. Explore more on how HR software can help your business in the Philippines as you read on below.
HRIS and Payroll Software Helping Companies in the Philippines
As human resources oversee various employment processes and procedures, they are one of the essential sectors of any company or agency. Employee management involves collaborating with all employees regarding various issues, including payroll management.
The Philippines has 32 pay rates, including overtime, night shift differential, and holiday pay, which complicates payroll processing. This makes them vulnerable to errors and delays, as well as discrepancies. These inaccuracies can lead to mistakes in salary payment, which often leads to unhappy employees and poor relations between employers and employees. These inconsistencies can lead to higher operational costs and more expensive expenses.
The Calculation of Philippine Payroll
The Philippines payroll has specific requirements that require companies to be registered with the appropriate government agencies. Learn below the statutory deductions used for calculating employees’ salaries in the Philippines.
The Standard Formula to Calculate Philippine Payroll
Net Salary = Gross Salary – Deductions
In the Philippines, standard payroll deductions are
- Philippine Health Insurance Corporation (PhilHealth)
- Home Development Mutual Fund (Pag-IBIG)
- Social Security System (SSS)
Elements of Philippines Payroll
Home Development Mutual Fund (Pag IBIG)
This is a national fund that provides home loans to employees of the Philippines for affordable housing. The salary determines the contribution rate. Employers and employees can contribute a maximum of P100 per month.
- Share of employees: 2% if the gross monthly salary exceeds P1,500
- Employer share: 2%
Philippine insurance company
Commonly known as PhilHealth. This affordable insurance plan covers all employees. PhilHealth is funded by 3.5% of each employee’s monthly income (1.75% for both the employer and employee).
Social Security system (SSS)
This government-mandated program offers several benefits to private-sector employees for sickness, disability, or maternity. It serves as a pension fund that the state manages for all lifetime members of SSS. Both employees and employers share the employee SSS contributions.
The Schedule of Contribution rates varies depending on the pay scale. Revisions to the SSS contributions amount to 12% of the monthly salary, for a maximum of P20,000. It can be divided into:
- Employee share: 4%
- Employer share: 8 %
Cost-of-living allowance (COLA)
The cost-of-living adjustment (COLA) is a mandatory benefit that covers all minimum wage earners based on the economy’s rising prices. However, recipients are not eligible for a COLA if consumer prices fall or inflation is not high enough to justify a COLA rise.
Holiday pay
The Philippine Labor Code requires holiday pay to compensate employees who work on holidays. Employees who work on regular holidays are paid 200% of their daily salary.
Overtime
All employees working in the private sector, except domestic workers or workers paid by results, are entitled to overtime for work beyond eight hours per day.
- For holiday work, the overtime rate is 30% of an hourly rate
- The overtime rate for regular workdays is 25% less than the hourly rate
To comply with government mandates, HR professionals and payroll masters must also submit various reports. For growing businesses, it can be challenging to file forms and get updated reports from the agencies that collect and monitor employee income taxes and contributors.
Employers in the Philippines are responsible for withholding taxes on employees’ salaries. Before distributing salaries, employers must calculate the taxable income of their employees. This sounds easy until the night shift differential and holiday pay arrive. Although employers are the ones to process the contributions, it can be a bit challenging for them to juggle business management and their responsibilities. Hence, it is ideal to consider extra help from a reliable cloud-based HR and payroll system.
Choosing the Right HR Software Company
There’s a long list of things to consider when selecting an HRIS or Philippines payroll, as well as the number of HR software companies in the Philippines. Each HR software company has different offerings depending on your company’s needs. For example, you’re looking for a payroll system for your company, or you may need an employee engagement platform. The best software type depends on what you need the system for, but you should look for ease of use and functionality.
The HR software sponsor will be responsible for making key decisions, keeping the initiative on track, and ensuring that the system is implemented in an intended way. Hence, choosing the best HR and payroll software like GreatDay HR is vital.
GreatDay HR is a comprehensive software solution that streamlines HR processes. You can manage employee leave requests, track attendance and handle payroll. The software also streamlines communication between employees by allowing them to track their activities and task management. It also offers continuous feedback and analysis that will help you improve your business’s efficiency. GreatDay HR is affordable when compared to other payroll and HR software packages.
Software can be tailored to suit the needs of small businesses and conglomerates. It’s affordable, which makes it attractive to small and large businesses in the Philippines. It also offers affordable add-ons and customizable plans tailored to your needs and budget.
CONCLUSION
Payroll management is highly complex; even a tiny error can cause costly damages. Although managing your payroll in-house is the best option for financial control, payroll processing challenges are not a simple back-office task, making it an excellent candidate for digitalization.
Cloud-based systems like payroll software can be customized to fit the needs of your business. Payroll software keeps track of taxes and salaries and syncs with your timekeeping device so you can track attendance, tardiness, and absences. Your payroll package software is technology-based, which can be susceptible to anomalies. Your HR team should be advised to keep track of absences and leaves so they can compare in case of a problem.
Get the best cloud-based software to help your business thrive in the Philippines as you check out more from GreatDay HR!
