Strategic payroll solutions and tips for your company — Depending on your type of organisation, you are bound to engage people’s services under different contracts. These differences vary and can result from work duration, type of service required, location of the team members, etc.
Here are some common classes of employees and how payroll management works for them
A full-time employee refers to a person who works a minimum number of hours as defined by their employer (i.e., you) under the influence of relevant labour laws. Full time employees are usually entitled to benefits packages such as sick leaves, paid time offs, health insurance etc. and these distinguish them from other class of workers who are not usually entitled to such benefits.
The payroll of this class of workers involves everything from; from updating employee information through implementing the necessary deductions to paying employees. It would be best if you validated payroll for correctness and completeness. Ensure that all payroll Information is managed to prevent unauthorised access, and statutory obligations are strictly observed to avoid penalties and fines.
These workers feature in an arrangement where a staffing firm temporarily assigns them to support or supplement your company’s workforce.
A Temporary Help can be a Personal Assistant, Domestic Help, Driver etc. Engagement with these workers can feature in one of two ways >>
- Your company assumes the full employment of these person(s) within a given period. In this scenario, the Temporary Helps are included in your company’s payroll. As such, statutory and other management processes will be binding on your organisation in the given period of engagement.
- The staffing firm retains the primary employer status for these Temporary Helps. In this case, you do not have to worry about payroll and certain other management processes necessary for their continued employment, since these will be borne by the Staffing Organisation.
Regardless of the route through which you chose to engage these temporary helps, it is important to observe due diligence in order to avoid being adjudged as an abuser of labour.
In outsourcing, there exists a contract for service engagement between your organisation and another independent legal entity who will be responsible for providing you with labour resources including outsourced staff among others.
The terms of contract for this form of engagement determines who is responsible for the payroll and related dues.
In the absence of a clear clause stipulating whether your organisation or the legal entity is responsible for paying the outsourced staff, then the legal entity becomes responsible and is therefore taxable, by law.
Contract professionals are self-employed service providers who may have a contract for service engagement between themselves and your company.
Payroll Management does not apply to these professionals. They are often compensated for their services after an invoice is submitted by the professional. Payment is made by your company, and instead of payslips, receipts are generated and shared with all parties.
Generating receipts can be particularly crucial for records purposes and to avoid any accusations on non-payment and similar issues.
Strategic Payroll Solutions — Creating An Effective Payroll Unit
Now that you understand the basics of payroll management and processing, it is important to set up a systemized unit in your organization that ensures you follow payroll best practices to remain compliant and eliminate all payroll risks.
Here are key strategic payroll tips for implementing for an effective payroll department in your organisation >>
- Create a payroll calendar to help run payroll efficiently and pay your employees based on a frequency determined by your company. Payroll calendars will feature pay period, cheque/pay date etc.
- Train and retrain staff to improve collaboration, reduce manual work, and boost productivity.
- Stay up-to-date with relevant State and Federal laws and regulations to remain compliant and avoid penalties.
- Avoid borrowing from payroll funds.
- Automate payroll processes to eliminate redundancies after your organisation’s payroll process have been sufficiently reviewed and standardised.
- Conduct regular payroll audits.
Let’s examine payroll audits more closely.
Whether or not you use a reliable payroll processing system, there’s always a possibility for user errors.
Mistakes like incorrect numbers, forgetting to implement a pay raise, failing to remove a terminated employee from your payroll, etc., are common. To combat these errors, it’s crucial to perform regular payroll audits.
Regular payroll audits can help you avoid mistakes, penalties, fraud, tax filing corrections, and disgruntled employees.
When conducting a payroll audit, key questions to investigate include:
- Does any employee raise need to be implemented?
- Are terminated employees still on company payroll?
- Are tax withholdings accurate?
- Are paid and unpaid time-offs accounted for?
- Are there disparities between hours spent and hours paid to staff?
- Is the payroll system compliant with the most recent legislation?
Doing all these will help keep your payroll system compliant and running without major glitches.
Strategic Payroll Solutions — Best practices and procedures in payroll management
Now that you’re well on your way to running a world-class payroll management system, here are final best practice tips for running an effective payroll function in your organisation >>
- Ensure that your company maintains an understandable payroll policy that is not in conflict with the national labour laws as well as other laws and regulations which have an impact on payroll management
- Maintain realistic budget and cash flows for payroll.
- Prepare Payroll promptly.
- Maintain payroll records
- Keep up with regulatory changes.
- Treat data security as a top priority.
- Use technology solutions to guarantee payroll data accuracy.
- Conduct regular payroll audits to promote data integrity.
- Outsource payroll activities that are too costly to maintain.
Without a doubt, an effective payroll management system is critical to your organisation’s success. Learn more on rudiments of payroll management in this guide on how payroll works
Have challenges executing a seamless Payroll experience for your organisation? Leverage Workforce Africa’s expertise and experience to help you set up a compliant Payroll solution tailored to your organization’s particular needs.
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