A remittance is the transfer of money to settle a payment obligation. In payroll, this includes paying employees their net salary and remitting statutory deductions and contributions to the relevant authorities.
What is a remittance?
A remittance is the transfer of money to settle a payment, liability or other financial obligation. For payroll teams, remittances typically include salary payments to employees and statutory payments such as Tax Deducted at Source (TDS), Employees' Provident Fund (EPF), Employee State Insurance (ESI) and Professional Tax where applicable.
Businesses also remit payments to suppliers, contractors and partners as part of normal financial operations.
Things to know
- Payslips provide a record of salary payments and typically show gross pay, deductions and net pay.
- Common statutory remittances include TDS, EPF, ESI and state-specific Professional Tax.
- Statutory payments follow strict timelines, and any late deposits may attract interest and penalties.
- Clear remittance advice or payment confirmation helps suppliers reconcile invoices and payments.
- Accurate remittance records help organisations maintain compliance and support payroll reconciliation.
FAQs
What kinds of remittances are there?
Remittances may include salary payments, statutory payments to government authorities, supplier payments, contractor payments and money transfers sent to family members domestically or overseas.
What is remittance advice?
Remittance advice is a document or notification that confirms a payment has been made and typically includes the amount, payment date and reference details.
What is the difference between inward and outward remittances?
Inward remittance is money received into an Indian account; outward remittance is payment sent from India to another country.
Who manages remittances?
Payroll and finance teams are typically responsible for processing payments, managing statutory remittances and maintaining accurate payment records.
