On Roll / Off Roll Payroll

The payroll of an employee starts as soon as he/she joins as a full-time employee in a company. On roll and Off roll are the two common types of payroll models under which employees get paid.

On-roll payroll is the regular payroll process under which an employee gets paid on a regular interval and received a fixed amount of remuneration in exchange for the services. The employee under on roll payroll is eligible for employee benefits such as EPF, Medicare, allowances, performance bonuses, etc. Since they work directly for the company they come under the company policy.

Off roll payroll means a person is not a full-time employee in a company but working on a contract basis or via consultancy. In this payroll model, the salary can either be credited directly or via a third party as he/she is not under the regular payroll of the company. The employee under off roll payroll does not receive benefits of EPF, insurance, allowances, and performance bonuses. He/she received compensation for his/her work

Frequently Asked Questions

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

In regular payroll, an employee’s working hours are calculated to estimate their pay and give their salary on time. Following this, whether the employee receives the benefits or not depends on the payroll model (on-roll or off-roll) the employee is under. If the employee is under the on-roll payroll model, he is eligible to receive employee benefits along with his compensation/salary. If he is under the off-roll payroll model, he is not eligible for employee benefits and only receives compensation for work. 

Why do companies hire on third party payroll? 

By hiring on third party payroll, companies save time of paying salaries, calculating taxes, overseeing payroll processes, generating reports, and managing end-to-end recruitment processes to focus more on the business growth without delay. 

What is an off-payroll? 

Off-payroll means that the worker/contractor is an independent contractor who is responsible for his own taxes. They are not eligible for any employee benefits or protections that come under the company’s policies. There may be some tax advantages like commuting, business-related expenses, and other deductions. However, according to the country’s employment rules, the off-payroll workers are eligible for provisions like EPF (Employment Provident Fund), ESIC (Employment State Insurance Corporation), and NSSB (National Social Security Board) to handle uneven earnings.