What is Payroll?
Payroll is the procedure of paying staff so that the employer must handle payroll on a regular basis to verify that employees are paid. The process consists of calculating the employees’ earnings and excluding deductions like taxes. Payroll might be a difficult subject but knowing each component of payroll can help you better comprehend the process.
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8 tips on managing your payroll effectively
Create a payroll calendar
Payroll calendars have several advantages, including informing employees when they will be paid and assisting your payroll staff with scheduling and executing payroll activities. Xero hk will help you set up a payroll calendar after you’ve established your pay schedule, which will also notify you to allow enough time to complete the payroll procedure for a few days. This reduces employee confusion about when they will get paid and how long their paychecks will last.
Allow your HR staff to attend payroll training
Even though human resource professionals’ main expertise is in recruitment and employee records management, processing payroll is still an element they will be involved in during their training process hence why it’s a good idea to organise payroll training sessions for your HR staff.
Some benefits payroll training provides are…
- Improves collaboration among HR and payroll departments & shares their known knowledge
- Reducing manual/double work: Save time & paper
- Provides a more coherent team: HR staff has an understanding of the payroll team’s procedures and is more attentive to the completion time
- Prevents conflict: Avoid misunderstandings between HR and payroll staff & provide employees with a better understanding of employment policies.
HR team’s deeper understanding of payroll regulations might assist to relieve some of the payroll pressure when interacting with employees hence improving staff interactions and boosting the overall mood of the office.
Be aware of any updates on tax obligations/reporting requirements
Employers must stay on top of their tax obligations as well as any modifications in reporting requirements. Changes may be caused for a variety of reasons, including company relocation, employee relocation and the use of remote employees. When this happens, it’s the employer’s duty to gather and update the information required to compute payroll and tax correctly.
In Hong Kong, companies need to report remuneration paid to employees by submitting an annual employer’s return form (either the BIR56A form, which is a cover letter for all the IR56B forms an employer has to submit, or the IR56B form, which is the form you have to submit to the IRD within the 1 month from the date of issue of BIR56A). The two forms are typically sent to the employer on the first working day of April.
Automate your payroll process
It’s simple to make errors in a manually administered payroll procedure, especially for a growing business with an increasing number of employees. Automating your payroll procedure might be advantageous to stay up with time-consuming tasks, which is why software like Xero accounting software might help you manage your employee payroll, benefits, third-party apps, and more in one place.
Observe transparency in your payroll process
Employee misunderstanding might occur if a business is unclear or does not provide its workers with a clear and sufficient compensation policy. A completely transparent payroll policy may be used to address a variety of payroll issues, such as underpaid taxes or employee misclassifications. A transparent payroll policy should provide key information such as how the payroll process works, company procedure for handling payroll mistakes, employee reporting responsibilities and how salaries and employees are determined, etc. It’s also critical to keep the employee handbook up to date and make sure it’s accessible to everyone.
Document your payroll process
Documenting your payroll procedure is one of the most crucial phases in controlling your payroll process since this helps to analyse your payroll procedure and the identification of its weak spots. Once you’ve established a payroll procedure that works best for your company, make a note of it and pass it along with the payroll crew to help ensure each payroll employee knows their position.
Maintaining a consistent payroll processing manual is beneficial since it covers all of the payroll procedures and reporting and checks handling process. Document the procedures for printing and submitting payroll registers and tax reports, as well as the individuals to whom you will be distributing paychecks and pay stubs.
Audit your payroll process
It’s also important to make sure that all elements of the overall payroll process are always audited. When you discover a complaint, it’s a strong indication that your annual audit should be conducted more frequently. Automated systems can also be affected by errors like incorrectly recording a new employee’s tax status (married vs single) or entering previous pay rates.
Things to consider to ensure an effective audit include:
- Verify and reconcile the accounting, payroll, and cash records to ensure that dollar values match across all documents.
- Installing a check-in system and/or biometric sign-in hardware so you can automatically record when an employee checks in for work
- Utilising plugins or add-ons to ensure payroll software is fully integrated with your time and attendance system
When employees express concerns about or struggle to comply with payroll rules, it’s time to evaluate your policies for accuracy and clarity. Employees should understand why completing tasks, like timesheet submission or timecard, is key in the payroll process.
Outsource your payroll tasks
It’s critical for firms to be able to pay staff promptly and correctly to avoid problems related to staffing. This might be stressful for a growing business in which activities such as payroll take longer hence it may be a good idea to consider a payroll outsourcing option. Payroll software is responsible for managing the system and processing every payroll plus the calculation of paychecks and taxes are done automatically and filed on your behalf.
If you want to take a more hands-off approach, utilising a professional employer organisation (PEO), instead of doing it all yourself, may be a better alternative since they operate as your company’s employer for payroll and tax purposes so they handle the majority of your HR and payroll responsibilities.
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How can Fastlane help?
Fastlane is a company that specialises in HR process improvement using cloud-based solutions and the assistance of our experts and appropriate payroll programs.
As one of the Xero Platinum Partners, FastLane uses Xero accounting software, which is one of the most key cloud-based solutions, to provide a precise and efficient payroll service. It allows you to generate payslips, and produce batch payments to make it easier to pay staff and manage wage-related expenses, all while remaining fully compliant with the local regulations. Xero also has features like new Payroll Admin Permission, which ensures that only users with this feature can use these features and view sensitive employee data. Xero also offers excellent add-ons to assist you with concerns like tax calculations and leave deductions. Visit www.xero.com to explore how Xero hk can benefit your business.
We are also partners of Deel, which provides a worldwide payroll service that allows businesses to hire people from 150 countries. They also have a tech-enabled self-service system that lets the company find and employ independent contractors or full-time employees from 150+ countries in only a few minutes, with 8,000+ customers ranging from small businesses to publicly listed companies around the world.
To know more about our payroll services and what we can provide via key features like Deel and Xero hk, why not get in touch with our professional advisor by dropping an email or arranging an appointment with us.
