Payroll management is a business process that involves keeping track of salaries, wages, bonuses, and deductions. It involves keeping track of hours worked, calculating wages and withholding taxes, and printing and distributing checks.
Think about your job: you work hard to provide for yourself and your family (even if you don’t have one yet), so you need to know that your paycheck will be accurate. At the same time, your employer needs a dependable system in place so they can pay you on time.
Feed the right information into the payroll software
If you’re a human resources manager at your company, you have an even bigger responsibility than just payroll processing services. It would help to make sure employees stay happy, motivated, and engaged in their work. Many problems associated with employee retention occur before they even join your company, during some of its most critical stages.
This can be especially true with payroll clerks. The act of paying employees is difficult enough without having to go through it nine times a month, but if that’s the case, HR managers need to get staff members up to speed on everything related to the process so they can enjoy every step of it: from signing up for direct deposit at a bank for free to updating their pay stubs monthly online and being able to see exactly where their money is going.
Collect and retain evidence of employee hours worked.
- Collect evidence of employee hours worked
- Retain evidence of employee hours worked for a certain period
You need to collect and retain evidence of the hours worked for each pay period. This is needed for payroll and other management tasks such as organizing shift schedules and managing attendance. Having this information collected accurately will ensure you can monitor your staff’s activity, which helps your workplace run more smoothly.
Calculate gross to net salary and pay employees on time
This is a very technical process, of course—you will need to deduct federal and state income taxes from the gross salary. You will also need to consider payroll deductions such as pension contributions, social security payments, health insurance premiums, and other employee benefits.
This can be a complex process because of differing tax rates depending on the state you work in and your filing status. Bear in mind that different federal tax brackets exist for different types of income. For example, there are different tax rates for short-term capital gains, long-term capital gains, and qualified dividends.
You should also bear in mind that any pre-tax deductions are excluded from your taxable income – this means that if you contribute $100 per month to a 401(K), then it will not be taxed until you withdraw it later in life (when you have retired).
Follow the country-specific rules.
Different countries have different rules regarding employee salaries.
This means that it’s important to understand your legal obligations and keep up to date with changes to local laws. Your payroll team should know about any upcoming changes or recent amendments to know how these will affect the business. Local laws affect payroll withholding and reporting.
Furthermore, they can also affect payroll calculations, employee benefits and payroll reporting, and deductions and benefits.
Implement automatic payroll management software and check it regularly
Using payroll software is the most effective way to manage your organization’s payroll without taking up significant time or resources. There are many options, so choose carefully and look for a solution to integrate with other key systems in your organization, such as benefits and expense management.
Once you’ve implemented payroll software, regularly check to ensure it’s working correctly. Ask employees to confirm their paychecks match what they expected and make sure any taxes are paid on time.
If you haven’t adopted the use of an automated payroll system yet, now may be the perfect time to start. If you’re already using one, but something seems amiss, reach out for help from a vendor specializing in this area.
Keep payroll data secure at all times.
- Keep payroll data secure at all times.
Data security is essential to the smooth running of your payroll and could even affect your company’s reputation, so it should be one of your top priorities. According to a recent KPMG study, 71 percent of companies experienced cyberattacks in 2017 — and that number is only expected to grow.
By encrypting payroll data in transit and at rest and implementing strong firewalls and cybersecurity protocols for all systems dealing with sensitive personal information such as social security numbers.
In addition, having both a data backup plan and disaster recovery plan could help you minimize downtime if any system issues occur with your payroll software or hardware. A business continuity plan (BCP) will help you maintain critical business functions during unexpected events such as a natural disaster or power outage that may impact your payroll operations or workforce.
Understand your legal obligations, such as filing income tax returns with your local tax authorities and reporting social security payments
Getting a payroll system up and running is a big task. It involves ensuring that employees are paid accurately and on time while complying with many regulations. To help you get started, we’ll walk through the key things HR managers need to do when they take over a new payroll system.
- Understand your legal obligations, such as filing income tax returns with your local tax authorities and reporting social security payments
Depending on where you’re located, employers have various legal obligations. These include (but are not limited to) payroll taxes, income tax returns, social security payments, and pension schemes that your company may have to pay out of its pocket. The government will use these taxes to fund employee benefits like maternity or sick leave or retirement pensions. Payroll taxes tend to be based on the employee’s wages, so it’s important to ensure that the correct amount is being taken from each worker’s paycheck at all times; otherwise, you could end up facing penalties for underpaying in the long run.
Automate payroll processes with a cloud-based system
Moving from manual to cloud-based payroll processing can be a great way to simplify and streamline payroll operations. Consider working with an ADP partner like [PARTNER NAME] to find the best solution for your company’s needs.
Here are the benefits of switching your payroll system to the cloud:
- Less human error: A cloud-based payroll system offers an automated workflow that helps you avoid data entry errors, including employee ID number typos and outdated or incorrect mailing addresses.
- Reduced processing time: With a system in which employees update their information, there’s no need for managers or HR staff to spend time gathering and verifying employee records.
- Increased efficiency: Cloud-based systems allow employees to enter essential information (like bank account numbers) once, then make any changes as needed. By eliminating the need for paper forms, they also make it easy for management teams to keep track of employee records.
- Cost savings: Eliminating multiple manual tasks reduces the need for additional resources, thus saving money that would otherwise be spent on paper forms and postage stamps.
- Invest in constant training of your HR staff and payroll staff on new laws, regulations, and technical changes.
- HR managers should consider investing in training to help their employees better interact with payroll processing when needed. Here are some ways HR managers can ensure this doesn’t happen:
- Employees shouldn’t be worried about the technical aspects of payroll processing or the software programs used by employers. The best way is to provide invoices and statements for payments, create a computer-based record for each pay period, and take biweekly payroll reconciliation and file it electronically.
- HR staff also needs to be trained to implement various new laws regarding employee benefits, such as health insurance and retirement plans. They should know what deductions will be taken and grasp what is affordable for any particular employer.
- HR staff should also get specialized training on supporting specific occupations or workers who experience unique challenges while working with payroll processing systems. This sort of training can help ensure that employees working in specific occupations who use payroll systems are receiving the appropriate benefits they are entitled to while working—and not being exploited by employers who aren’t paying their rightful share of taxes, insurance premiums, or pension contributions
A good payroll process involves more than just the HR manager; it requires constant awareness of all parts of the company to ensure an accurate payroll process and a solid understanding of your legal obligations.
Processing payroll isn’t rocket science, but it is a complex process that involves more than just the HR manager. Everyone in your company has to be aware of how the process works and its effects. In addition, a thorough understanding of your legal obligations is required for you to ensure an accurate payroll process.