- January 10, 2018
- Posted by: admin
- Category: Payroll, Payroll & Compliance
Across several organizations that we begin to work with, here are some of the common payroll issues that they have run into in the past. Let’s also talk about how to take care of them
Considering updated tax declarations
We all know that deducting tax, on behalf of employees is the responsibility of the employer. Employees go ahead and make tax declarations, which impact their tax deductions. However, in several companies, these tax declarations tend to be manually (& could be updated periodically by the employee) entered in the back-end system. This can lead to errors creeping into payroll, particularly with reference to the tax deductions. Deducting excessive tax can lead to lower take home for employees and it can quickly become an issue to deal with.
Accessing updated attendance data
A lot of companies have different systems to record attendance, including manual mechanisms or digital means like biometric scanners or RFID based access control systems. While electronics is great, when it works, there usually are several exceptions that need to be managed by HR teams and on approval by the managers, these corrections to the attendance data need to be updated in the system. It is quite likely that this updated data might not be referred to, while making the final payroll calculation and an employee might find himself being paid short for the month.
Managing loans and advances
As a part of staff welfare, you may have extended loans and advances to eligible employees. Their repayment schedule and interest, if any needs to be factored into the deductions, while calculating payroll. Since loans are advanced to only a few employees, it is quite common to see organizations slip on this point.
Managing payroll and non-payroll reimbursements
Payroll and non-payroll reimbursements need to be treated separately and there are set regulations, especially on how payroll related reimbursements should be processed. It is quite common to see organizations not follow the set procedures. Non-compliance can put your organization at risk, which could very easily be avoided.
Accessing the right leave information
The way leaves are managed for employees is different across organizations. Some prefer to keep manual cards. Some prefer to go the digital route with advanced leave management systems and configured approval workflows. Either way, this information needs to be factored, while computing payroll for an employee. It is common for organizations to overlook this and then try to reconcile payments in the following months. All of this projects a very unprofessional culture to the employees working with your organization.
Lax Data Security & Storage of records
As per regulations, it is necessary for the organization to maintain records for a certain number of years. If you are not doing this, it can expose you to risk, in case an audit comes up. Also payroll data needs to be secure. If it falls into the open domain, it can lead to a lot of dissatisfaction among employees. Leakage of salary data is very dangerous, it could also lead to identify theft, data breaches
I hope you find this useful. Your feedback and suggestions are welcome
If you need any help to drive your Payroll operations efficiently, please feel free to reach out to Finsmart. I can schedule a one-on-one session with one of our payroll experts.
Abhishek Shrivastava (Finsmart Solution)