Every month, businesses undertake the crucial task of calculating and disbursing salaries to their employees. Salary accounting, which involves meticulous bookkeeping of salaries and deductions based on actual earnings, is a highly significant and sensitive responsibility. This process directly impacts the relationship between businesses and their employees.
Competent and precise salary accounting is a fundamental requirement in payroll management. Below, we will delve into the steps involved in salary accounting and monthly payroll services, including social insurance and union fees.
1. Salary Accounting and Deductions
1.1. Salary Accounting - Account 334: Payable to Employees
Account 334 is utilized to document amounts owed to employees and the business's payment status for these amounts. The structure of account 334 resembles other accounting accounts, comprising a debit side and a credit side. The components on both sides are outlined as follows:
1.1.1 Debit side
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Accounts payable to employees: encompassing salaries, wages, bonuses, and other stipulated amounts.
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Deductions made by businesses from employees' salaries and wages.
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Transfers of wages not received by employees.
1.1.2 Credit side
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Salaries, wages, and other payments payable to employees.
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Credit balance: outstanding amounts owed to the enterprise's employees.
What are the specific tasks of the payroll management service?
1.2. Accounting for Salary Deductions - Account 338: Other Payables
Account 338 serves to illustrate the business's payment status for payables and contributions to social organizations, covering salary deductions such as union fees and social insurance. The categories on both sides of account 338 are detailed as follows:
1.2.1 Debit side
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Contributions to communities, social insurance, health insurance, etc., payable to management agencies or employees.
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Amounts due to employees for community contributions, social insurance, health insurance, etc.
1.2.2 Credit side
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Deductions of community contributions, social insurance, health insurance, etc., from production and business costs, subtracted from employees' salaries.
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Subsidies provided by the state for community contributions, social insurance, health insurance, etc.
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Reflects the value of excess assets awaiting disposal.
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Other payables.
Debit balance: Overpayment, unrecovered overpayment, and unpaid overpayment.
Credit balance: Amounts pending payment, payable, and the value of excess assets awaiting processing.
These represent the primary accounting accounts employed in the intricate processes of salary accounting and deductions within businesses.
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2. Principles of Accounting for Salaries and Deductions
Salaries for each department are accounted for in the corresponding expense accounts of that department. For example:
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Salaries of purchasing department employees are recorded in account 641 – selling expenses.
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Salaries of the executive board are recorded in account 642 – business management expenses.
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Salaries of production department labor are recorded in account 622.
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Salaries of production department supervisors are recorded in account 627 – general production expenses.
Deductions from salaries consist of two parts: the first part is borne by the business and is accounted for in the corresponding department's expenses; the second part is borne by the employees, collected and deducted from the salaries payable to the employees.
Accountants need to regularly update the latest deduction rates to apply them accurately to the business.
3. Develop more professional payroll services for businesses
Remote Payroll Services have been popular and concentrated in American countries for many reasons such as preventing information leakage, fraud, or cutting personnel costs. According to statistics from market research company Research and Markets, the payroll market size in 2020 is 17.9 billion USD and is expected to reach 22.8 billion USD by 2027. In Vietnam, foreign-invested companies are also starting to consider entrusting payroll operations to professional companies.
Mr. Yusuke Kaburagi, General Director of a payroll outsourcing company, stated, "In recent years, Japanese companies have shown a growing awareness of compliance and anti-fraud measures for their foreign subsidiaries. Nevertheless, there are still numerous instances of payroll fraud, contributing to a rising inclination to outsource these operations. In Vietnam, ensuring full employee compliance with company regulations and rules poses challenges due to high turnover rates and limited awareness regarding personal information."
The Payroll Service plays a pivotal role in assisting businesses with a comprehensive range of activities related to salary management. From salary determination and statistical analysis to income tax calculations, insurance, and generating reports related to personnel changes, monitoring, and overall human resource management, this service offers a holistic solution. Leveraging intelligent software and supported by a team of highly qualified and experienced experts, businesses can offload the administrative burden. This strategic outsourcing allows companies to redirect their focus towards more robust production and business activities, ultimately contributing to enhanced operational efficiency and growth.
Above, Faro Vietnam outsource payroll services has provided you with highly detailed information about salary determination. As evident, accounting and salary determination are intricate tasks demanding expertise and precision. In addition to having competent human resources, utilizing support tools is a crucial element in aiding businesses to effectively manage salaries. If you wish to delve further into this service, contact us now for comprehensive advice from A to Z!
CONTACT FARO VIETNAM today for outsource payroll services.
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