A sneak peek into these crucial functionalities will help to understand the basic working of an existing payroll system:
Calculation of ‘time’ and ‘wages’:
- Working hours, hourly payment, vacation or holiday time that an employee has taken during the payment period.
- Estimation of gross pay by exempting taxes and any other deductions.
- Payroll deposits or paper checks
- Manage labour expenses
- Employee headcount
- Vacation balances
- Highest and lowest-earning employees
‘Tax processing’ and ‘Payroll deductions’:
- Calculate and automate tax payments to the concerned authorities
- Other payroll deductions such as those that are voluntary and wage garnishments
Complicated calculations and assumptions go into the drafting a decent payroll, and hence certain aspects need to be kept in mind:
- Clear transparency by filtering the employees based on wages, promotions, or a salary hike.
- Set payroll deadlines in order to avoid payment delays like a tax.
- Status of the employee in terms of exempt and nonexempt employees. Also, overtime calculation to avoid any miscalculation leading to any financial loss to a business.
- System integration to keep the payroll system in a loop for any information shared.
- Flexibility in payment option.
- Outsourcing for expertise to perform the task.
- Spreading awareness among staff.
- Perfect ‘working time’ recording (increase productivity and avoid unwanted overtime payments)
- Testing a new system at an initial stage to avoid the loss of time, energy, and utilities invested.
- With zero tolerance for errors, implementing technology becomes the utmost necessity to optimize resources and get better accuracy. Hence ERP (Enterprise Resource Planning) needs to be applied, which will perform multiple iterations and validate the inputs provided and the generated payroll data. Thus, this will help, run, to retrieve and review data easily.
However, there also comes a risk of data security and protection against a breach. So, to avoid this laydown policy and procedures to adhere to, measures to protect information like changing passwords, install identity protection programs and monitoring systems and create awareness on privacy culture.
To know how we can help you with the payroll management process, contact us today!