On Roll/Off Roll Payroll

What Is On Roll Payroll?

On Roll Payroll refers to employees who are directly hired by a company and are part of its official workforce. These employees receive salaries through the company’s payroll system and enjoy benefits like health insurance, paid leaves, provident funds, and other statutory perks.

Key Features of On Roll Payroll Employees

• Hired directly by the company.
• Receive a fixed monthly salary with legal deductions (such as PF, ESI, and TDS).
• Entitled to company benefits like medical insurance, bonuses, and leave policies.
• Have a clear career growth path within the organization.
• Higher job security compared to off-roll employees.

Example of On Roll Payroll

Imagine you are working in a corporate office as a full-time accountant. Your salary is deposited directly by the company, and you get benefits like medical insurance and annual bonuses. You are also eligible for promotions and other employee benefits. That’s On Roll Payroll in action.

Advantages of On Roll Payroll

• Job Security – Employees have long-term job stability.
• Employee Benefits – Includes health insurance, PF, and other perks.
• Career Growth – Employees can get promotions and salary hikes.
• Legal Protection – Follows all government labor laws.

Disadvantages of On Roll Payroll

• Higher Employer Costs – Companies must pay statutory benefits.
• Less Flexibility for Employers – Difficult to fire employees immediately.

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What Is Off Roll Payroll?

Off Roll Payroll, on the other hand, refers to employees who are hired through third-party agencies. They work for a company but are not on its official payroll. Instead, a staffing agency or contractor manages their salary payments and employment terms.

Key Features of Off Roll Payroll Employees

• Hired through a third-party vendor or staffing agency.
• Salaries are processed by the agency, not the company they work for.
• Fewer or no company-provided benefits (like PF, insurance, or bonuses).
• Employment is typically contractual or project-based.
• Limited job security and career growth opportunities within the company.

Example of Off Roll Payroll

Let’s say you work as a security guard in an IT firm, but your salary is paid by a staffing agency, not the company itself. You may not get paid leaves or bonuses, and your contract may be renewed or terminated based on the company’s requirements. That’s an Off Roll Payroll job.

Advantages of Off Roll Payroll

• Cost-Effective for Employers – No need to provide extra benefits.
• Flexibility – Companies can hire based on project needs.
• Quick Hiring Process – Staffing agencies handle recruitment.

Disadvantages of Off Roll Payroll

• Lack of Job Security – Contracts may not be renewed.
• Fewer Benefits – No PF, health insurance, or paid leaves.
• Limited Career Growth – Fewer opportunities for promotion.

Key Differences Between On Roll and Off Roll Payroll

Which One Is Better: On Roll or Off Roll Payroll?

The choice between On Roll and Off Roll Payroll depends on various factors, including job type, company policies, and employee expectations.

• For Employees: If you want stability, benefits, and career growth, an On Roll Payroll job is the best option. However, if you’re looking for short-term work or flexibility, Off Roll Payroll may work for you.
• For Employers: If the goal is to build a long-term workforce, hiring On Roll Employees makes sense. However, for temporary projects or cost-cutting, Off Roll Payroll is a better option.

How Companies Use On Roll and Off Roll Payroll Together

Many companies use a hybrid payroll model, employing both on-roll and off-roll workers based on their needs.

For example:

• On Roll Employees: Managers, executives, and permanent staff.
• Off Roll Employees: Security guards, housekeeping staff, and temporary IT workers.

This approach helps companies manage costs while ensuring that key positions are filled with permanent employees.

Legal Aspects of On Roll/Off Roll Payroll

Employers must comply with labor laws, even for Off Roll Payroll employees. Some key legal aspects include:

• Minimum Wages Act – Ensures fair wages for all workers.
• Employees’ Provident Fund (EPF) – Some off-roll employees may still be eligible.
• Contract Labour (Regulation and Abolition) Act – Governs outsourced workers.
• Shops and Establishments Act – Regulates working hours and benefits.