The union budget 2020 was announced a couple of days ago. No doubt, it has brought in some significant changes for the corporate world. Under the union budget 2020, the changes made under the personal tax regime are already being talked about. Further complicating the matter, the optional tax has been applied while keeping the existing income-tax slab intact. According to the new tax regime, further exemptions and deductions will be made at a reduced tax rate. As of 2020, individuals have been given the liberty to continue with their previous tax-slabs or opting for the new one according to their preferences.

What’s in it and the things that HR managers are talking about…

Under the new tax regime, individuals with their gross income up to 5,00,000 INR will be exempted from tax under both the existing and new tax regimes. All that being said, such complicated tax rates are going to create further confusions among the HRs, which we will be discussing in a while. According to the new union budget, tax-payers have been given the privilege to opt either for the previous tax regime or the new one implemented this year.
Now, whatever they may choose, employees need to declare such to their employers before 31st March of this year. Further including, once they choose their taxpaying option, there’s no going back. For all the employees opting for the new tax regime, the direct tax shall be deducted from their salary while for the other remaining at the previous slabs; they need to keep track of their taxes as they had been doing for the last couple of years.

Challenges that the HR managers might have to face soon

The above-mentioned taxation scheme might be easy to understand from the perspective of an employee; but for all the employers out there managing their payrolls, this is certainly going to create lots of confusion. For all the HR out there, managing more than a hundred people, keeping track of every employee’s preference is going to take a severe toll on their work efficiency. While the government might not have considered such an issue, but over time, this chaos will certainly affect the internal affairs of the company.

Take, for instance, all the employee opting for the new taxation regime, they cannot exercise a whole bunch of exemptions that they might have earlier sought including LTA, HRA etc., which might end of getting more payment.
Outsourcing Payroll Services: Why it makes more sense in the current scenario?
With all the pain points that the new budget has created for the HRs, the most acceptable solution for such is outsourcing the company’s payroll. Outsourcing as the word implies is all about putting forward all the responsibilities related to payroll to other companies which are accustomed to dealing with such challenges. Down below are some of the advantages opting for an outsourcing payroll service which in turn could be beneficial for your company:

1) Saving Time:
One of the greater evils when it comes to managing payroll is time. Majority of the times, during month-end, the HR needs to work around tight schedules while managing payrolls for the employees. Outsourcing your payroll process can save time for your staff.

2) Cost-Effective:
Don’t be skeptical about it, but outsourcing your payroll has been proven cost-effective over time. Hiring a company to do your payroll can be far less expensive than getting the same work done by hiring exclusive staffs within the company.

3) Security:
Companies that do payroll outsourcing services usually use software which can easily detect fraudulent activities regarding the payroll. While restricting several malpractices, it can be helpful for your company for securing classified information.

4) Reliability:
Working with outsourcing companies can provide you with cutting edge technological solutions that you can always rely upon. Working with cloud systems and automation, you can also enjoy the liberty of not losing your entire data.

5) Paperless:
If you want paperless payroll done for your company, there’s no better way rather than to reach out to a payroll outsourcing service provider. You can easily eliminate all the paper bound procedures while adapting to an efficient and reliable system of generating payroll for your employees.

Final takeaway
Besides the above, there are many more reasons why outsourcing your company’s HR related tasks and responsibilities to the capable hands. Taking into account the current changes in the tax slabs, outsourcing is the right decision you can make. Instead of bestowing all the excessive work over the HR, the best suitable solution is to opt for an outsourcing payroll service. Keep in mind that this is going to make your business operations a lot simpler.