What is On roll and Off roll payroll?

On-roll/off-roll Payroll is how an organization pays its employees for the work done. Generally, employees need to have an online banking account and qualify by setting up payroll deduction or direct deposit as a payment method. Once the organization has set up a Direct Deposit account, it can make all its payroll payments electronically, without paper checks.

What is on-roll payroll?

On-roll payroll is when an employer hires employees on a regular, long-term basis and gives them regular salaries, benefits, and rewards. Employees on on-roll payroll are a permanent part of the workforce and enjoy job security.

What are the components of on-roll payroll?

The employees who are on-roll payroll receive monthly compensation that has various components like the

• Basic salary: It is the regular payment employees receive in exchange for their services.
• Allowances: These are the additional payments made to employees for their needs, such as travel allowances and house rent allowances.
• Employee benefits: Many employers provide employees with benefits like PF, gratuity, and even health insurance. Only full-time employees receive these benefits.
• Overtime wages: Employees who work overtime are compensated for the extra hours they put in.

What is off-payroll?

Off-payroll refers to employees hired by the company indirectly, contractually or freely. These employees are not entitled to employee benefits and are usually employed for specialized tasks.

What are the components of off-roll payroll?

The off-roll payroll employees receive less benefits than the regular employees. But the off-roll payroll still has various components like –

• Service fee: This is the employee’s fee for the services provided to the employer. The payment is deposited directly into the employee’s account.
• Contractor fee: If the employee lands a job as a contractor, they can charge contractor fees or work as a contract employee.
• Third-party payroll model: In this model, employees receive the salary through a third party rather than directly from the employer.
• Reimbursements: Sometimes, off-roll employees must invest in other work-related components, such as travel and internet bills. In that case, the employer reimburses them for the expenses.

FAQs

What is the difference between an on-roll and an off-roll payroll?

On-roll employees are full-time permanent members of the workforce and receive compensation directly from the employer. In contrast, off-roll employees are contractual/freelance employees who are not permanent members of the workforce and may or may not receive compensation directly from the employer.

What is an off-roll salary?

Off-roll salary is the compensation an off-roll, contractual/ part-time employee receives from the employer. It doesn’t have to be monthly, and the employee can also receive it weekly, bi-weekly, monthly, quarterly, or even after the project’s completion.

What are the benefits of on-roll jobs?

When they take on-roll jobs, employees receive plenty of benefits, such as allowances, health insurance, PF, and gratuity.