Payroll for food processing units

Setting up daily-rated workers

Direct Payroll works from a monthly gross. For a worker paid ₹500 a day, set the monthly gross at ₹13,000 and use a fixed 26-day loss of pay basis, so each day is worth exactly ₹500 and the finalized attendance month supplies the paid days. In a month with 26 working days, a worker present on 21 earns ₹13,000 less 5 days of loss of pay, which is 21 x ₹500 or ₹10,500. Check the daily rate against your state's notified minimum wage for the worker's category.

Wage structure and the 50 percent rule

Office, QA and maintenance staff get the usual salary structure, and even a daily-rated worker's gross should be split so that basic and DA make up at least half. Under the Code on Wages, allowances above half of total remuneration count as wages when PF, gratuity and bonus are worked out. Keep the split simple for line workers so the payslip is easy to read, and explain it once at joining in the worker's language. See the wage definition rule.

Incentives, advances and bonus

Production incentives come from the plant's production records and go into payroll as incentive inputs. Keep the rule simple and visible, for example ₹20 per tonne above the daily target, shared equally by the line, so workers can check their own figure. Festival advances are common before Diwali and should be recovered in small instalments that stay within the deduction rules.

• Production incentive per tonne processed, shared by line
• Attendance bonus for full attendance through the peak
• Festival advances recovered in instalments
• Statutory bonus for eligible workers
• Leave encashment for leavers

Season-end payroll

When the season ends, many workers leave in the same week. Wages are due within two working days when a worker leaves for any reason, so the regular monthly run is too late for them. Run off-cycle payroll for each batch of leavers, with paid days ending on the exit date, and include approved overtime, leave encashment and pro rata gratuity for fixed-term workers where it applies. Pay through an approved payment batch the same day.

How to set it up in ZeniaHR

1. In Direct Payroll, set a daily-rated worker's monthly gross as the daily rate times 26, keeping Basic and DA together at 50 percent of gross or above.
2. In the deduction policy, choose the fixed 26-day loss of pay basis and decide whether weekly offs and holidays are paid.
3. Finalize attendance early each month so paid days flow into the run, bounded by joining and exit dates.
4. Enter production incentives, attendance bonus and advance recoveries as monthly payroll inputs.
5. At season end, run off-cycle payroll for each batch of leavers and pay them through an approved payment batch.
6. Use a bonus run for statutory bonus, and check PF and ESI lines on the first payslips of seasonal joiners.

Read more about payroll in ZeniaHR.

Roles this applies to

Frequently asked questions