It is indeed a difficult endeavor to provide for the livelihood of many employees. It is important that all the proceedings related to payroll are done accurately, else employers risk losing the goodwill and trust of their employees. The IRS takes serious action against payroll penalties. So, employers must make sure that they are completely on point while dealing with all errors related with payroll. They must make sure to pay all the taxes, fill all the required forms for the government and most of all, make sure that the employees are paid the amount on the right time.
A few tips to prevent errors in payroll
The simplest way is to make sure that the bookkeeping is done with the sharpest accuracy and is up to date with all the data related to the payroll. All the documents related to employees, and this includes time sheets, should be curated in an orderly manner. It is also important to adhere to the right date on which the employees are supposed to be paid.
Payroll check errors
When an employee is given their payroll, the amount written should be processed accurately. The taxes that have to be deducted and other detailed should be calculated correctly and then the check should be made. But sometimes, payroll checks, which include bonuses and payday advances, are simply not updated on the books and this causes an error while balancing the books.
Processing gift cards and other gifts
A good way to reduce deductions to an employee’s gross pay is to give gift cards, prizes and awards. These come under taxable fringe benefits. But since these gifts do have monetary value that can be redeemed by the employee, it is important that are added in the pay stub along with the other deductions. This may be considered a part of the net pay.
Re-imbursement schemes
In some schemes, the employee is reimbursed by the employer for all expenses that they incur for the sake of business transactions for the company. In such a case the employer should receive the excess amount that remains after such a transaction. This should also be added in the relevant field.
The payroll process
The employees should be paid what has been the mutually agreed amount by the employer. Sometimes, errors do occur and the employees might receive a paycheck that contains an amount that is higher or lower than their net salary. Such instances must be rectified from both the ends, in order to prevent mistake in the bookkeeping.
Why save your stubs?
A paystub, by itself is seemingly an inconsequential document, but it must be safely retained by the employees. This is because the pay stub contains the employees’ pertinent information such as social security number, bank details etc., and also various fields of their net pay. This is also a proof for both the employees and employers. Payroll can be processed smoothly, provided both the employer and employee co-ordinate.
Payroll check is a paper document that an employer pays an employee for services rendered. This document contains the full breakdown of the various components that an organization provides. The payroll check holds the net amount that an employee has earned.
Payroll check and payroll stub
A payroll “stub” on the other hand, holds details of all the deductions including insurance, tax and even other deductions from the gross pay. Most companies usually simply transfer the amount while sending the pay stub to the employees.
Indications on a payroll ‘stub’
The stub will contain the name of the company on the upper side of the sheet. It will also contain a detailed breakup of the salary and the amount deducted in federal, local and state income taxes. Usually, the check is added with the pay stub; the check can be identified in a few ways. The check is a thicker sheet of paper, and if you hold the check against a light, it will show a watermark of the company. The check will also have the company logo and address, along with the bank logo and address.
Tracking net pay’
It is imperative that you track the amount that you receive in hand and calculate it from all the deductions. If you have any investments or other loan payments, your deductions will be reduced. There are many deductions that are mandatory, such as social security tax, wherein every citizen has to set aside a 6.2 % for the gross social security fund. It is the same for the national health care insurance.
What is a paycheck like?
A paycheck is given based on the payment cycle of the employer; it might be weekly, bimonthly or monthly. The paycheck is made out to the employer and contains the details of the employer along with the bank details. The check contains the sign of the employer. It contains the net pay that the employee is entitled to. Sometimes the employees may not have a basic bank account, and in this case, the amount is transferred to a payroll account. The employer will be the owner of this account. The employee is given the payroll card, which functions as a debit card, to access their salary.
Other facts
It is important that the payroll check is given right on time. Otherwise the IRS will take action and put a fine and treat it as a penalty. Many employers, in a bid for security, usually create electronic paychecks and pay stubs. These are sent to the employee email ids and can be easily accessed by the employees with a specific password. The payroll check is also valid for a specific period of time and must be encashed before the end of the time period.
A corporate set up is complete when it can an efficient HR department is established. HR department under takes various activities or so as to be called as various services, ranging from recruitment services to employee welfare services which include payroll services and sub-service of employee payroll. A subset service under payroll service is employee payroll, consisting of both man power and technology. An HR is assigned for handling particular segment of business unit and its employee’s payroll using junior HR who would co-ordinate and technologies like HR dashboard where in an individual can access their payroll related details and update it need be.
Employee payroll desk takes up all the queries employees might have resolves them effectively. Employees can either contact their payroll SPOC directly or over online services. Nowadays, an Interactive Voice Response (IVR) system is also set up to handle as many queries as possible and as accurately one can imagine. While a bit of it is handled by manpower, most of it is done automatically using technology such as email, IVR, portal, business dashboard etc. The process involves an employee would raise their concerns regarding the payroll to be it taxes or deductions and more via a ticketing system and a ticket will be assigned with a service level agreement. An attendant HR will handle your query timely and efficiently throughout the life span of a ticket raised.
Technically some of it can even be automated, for example “ navigation of the HR employee payroll dashboard, training of filling tax, learning on investment declaration and related topics. An automation can direct the employees to the frequently asked question and answer for a faster resolution which may not involve a human involvement. Building such databases is also part of problem management. Instead of handling a ticket for the smallest query which could be resolved by reading certain content or links then you have reduced the incoming query tickets and yet you would have automated some part of the support and save an employee’s time.
Some of this technical support can be outsourced as with respect to outsourcing can be less cost involved than running the support in-house. Also, outsourcing a payroll service to another firm involves a contract where in the hiring, training and attritions are vendor’s duty to fulfill. This gives plenty time for in-house HR department to spend more time with their employee’s welfare part. Being present with them and supporting them on how they can get their smallest queries resolved by using tools and technique is simply smart.
Payroll service is one of the hottest business ventures in the world today. Offerings from the independent HR firms are not just alluring and but also end up providing the best value for your money. The hassles of following up on recruitment services, payroll queries handling, etc. is now being taken over by third party HR companies. The firm works independently, offering payroll services as one of the packages as part of many other services. Everyone, right from giant corporations and mid-sized firm to even the smaller organizations opting for outsourcing the payroll services piece to third party companies as compared to handling the service by themselves. Bearing in mind both cost and resource effective, outsourcing the payroll services is now a trend in the market.
Listed below are the tips to choosing the right company for outsourcing the payroll services which is a part of HR department. Anyone looking to venture into third party payroll service ventures needs to take care of the following:
One needs to have a very deep and hard look at service level agreement (SLAs) offered by the consulting firms.
Understanding the pitch from each organization “ Quality, capacity, skills, etc.
Laying across your requirement as to how you are expecting payroll services to be handled, essentially having an official read-out document.
Organizational level commitment, deliverables etc.
Professionalism and Personalizing capability of the firm towards the employees.
Reputation of the firm and market standard.
Cost effectiveness for the service offered.
Previous experiences of the consulting firms.
Market ranking in the industry.
Communication expertise.
The requirements differ from organization to organization and so would the package prices. Some consulting firms do offer the services on a trial basis inorder to gain the trust of the buyer and collect feedback on how they can improvise. Different services have a different price tag. There would also be add-on packages as well where offers of recruitment, training and on-boarding as a one-time service along with payroll services as well. The add-on packages are mainly experimental to understand the requirement from the client and a trial to land a winning contract. Having said this, the main criteria for choosing remains world class quality and great levels of service. Any organization outsourcing its payroll services would expect the best for its employees with respect to service, quality and metrics. An operations team may or may not be co-located with the organization outsourcing the service. However, the service should not be compromised ever and must be established to the best of its ability to serve the organization and the employees well.
Payroll services are a part of HR (Human Resources) department in every company. It is the HR department which spends a good amount of time for their valuable employees by handling their leaves, payroll queries, performance reports and any HR related questions. Each employee is entitled to complete attention of their respective allotted HR for answering any queries they have anytime and anywhere in a professional manner. It is mandatory to have a specialized HR department in every company which consists of more than 10 employees. Payroll services can be outsourced as well and have their own benefits. Many consulting firms offer HR and payroll services for a cost.
The services offered these firms are impeccable, with some of them even winning awards for the same. They are really good at what they do. They are affordable and worthy of the money that an organization spends on them. The process of management of an employee is delegated to a professional firm when you outsource the payroll services part of the job to a firm. The firm can take more services from HR department of the outsourcing company.
Some of the excellent benefits of outsourcing payroll services are listed below:
Clear defined contract and duties of the vendor.
Employee management “ the career life cycle of an individual in that organization, right from hiring to exit formalities.
Cost effective management
Background checks and reports, on-boarding formalities.
Efficient methods to handle all the employee queries.
Adherence monitoring to all the client compliance polices.
Resource management “ Strategic placements.
Training, deployment, employee payroll services etc. are handled without too many glitches.
Process oriented and serve level agreement duties.
Career upliftment of an employee by giving individual attention and career counseling.
Many such support services are offered when you sign up with an external firm to take care of the payroll services for a company. These offerings are done in an absolutely professional manner and the quality of work delivered is quite commendable. These consulting firms offer customized package of the services that one can leverage. All the professional consultants are assigned as per the client requirement and take on the responsibilities without any further delay and deliverables are presented without compromising on the quality of service. Taking upon a third-party consulting firm to handle your employee relations could take the business to a whole new level with higher standards. Many consulting firms offer these solutions are competitive prices in the market.
A payroll service is set up for every company and is run by HR (Human Resources) department. The HR department takes on hiring, firing, employee welfare and payroll services for its company’s employees. The payroll service is particularly set up for employees handling their payroll process and queries. Payroll services are both offered in person and online. Each and every employee of the company is given access to their individual payroll services dashboard which will be accessed via both internet and intranet links.
Components of employee payroll
Employee payroll consists of various components, for example, employee performance report, employee hike letter details, tax declaration details and more. All the details are constantly verified and updated. The details are highly confidential. Hence to maintain the confidentiality the details pertaining to an individual is only made available. The details cannot be publicly accessed bearing the privacy in mind.
How employee payroll works
The HR department can also outsource the employee payroll system in case of cost cutting or for any other reasons. The outsourcing happens only after a formal knowledge transfer and contract signing. The contract may contain Non-disclosure agreements, payment cycles, pay out dates, tax form calculation systems etc. Employee payroll also maintains an employee data even after resignation or termination in their database for various purposes. One such could be if the employee was an exemplary candidate, he/she may be contacted in the future for new roles. Employment verifications, employee feedbacks and so more reason to maintain a database of ex-employees.
Importance of HR in employee payroll
Human Resources is the heart and soul of a given establishment. As per the rules of government, any company or association having more than 10 people working for it should have the HR department as part of the company to take care of the employees for their needs and requirements. Benefits of having an HR listen to your needs and support is that usually they take actions quickly and take care of the needs as efficiently as they can. They are the only department which works independently and as much rationally as possible. Payroll services are part of HR offered services and yet under that employee payroll is a component which handles the remuneration, hikes, and data pertaining to individual employees. Payroll services also offer a help in hand when you have payroll queries as investments declarations, filing tax returns and various other payroll related questions. The questions are answered professional and at satisfactory levels.
Payroll services play an integral role in any given organization in the world today.
Qualities a payroll service should possess
Services like quality, technology and so on must be a prime objective for any payroll firm. In terms of technology used, it must be safe, secure and reliable enough for its employees to access it without fear or doubt. Every query raised by an employee must be answered with this prescribed timeline. Each of the service availed is billed to the parent organization. Consulting firms whom you have outsourced the work must provide service, handle payroll queries, tax declarations, hike, performance documentation, and counseling. These outsourced companies have different pricing for level services provided. It can even vary upon the number of your employees to be handled by the consulting firm.
Right from handling the payroll queries and resolving them as per the agreed terms, the firm is liable to publish individual reports and records on the employee dashboard, hosting all the related information. Most of it is a software with all the automated tasks for each of the employee and maintenance of their database. These databases must be maintained at zero error criteria as some of the information on the employee record is critical for auditing purposes.
Why outsourcing makes sense
It is one of the most important parts of the HR (Human Resources) department. Well, it’s not surprising when you think of outsourcing payroll services in-order to leverage the non-compliance policies to an extent and avoid the daily hassles of hiring, training and making a candidate ready to take on a position.
It’s exactly how it all began. There was a demand worldwide that a firm should be in a position to outsource its payroll services which is a subdivision of the HR department to another trustable organization in order to cut down on the liability part and take one some of the trending concepts of building a software, offering solution etc. Invest a chunk of cost and energy into a model which takes care of employees and payroll while working in tandem with the HR department made perfect sense.
Outsourcing works like a charm since an organization will have an entire third party firm taking care of its employee while it re-invents its market presence, expands its line of products, improves its marketing strategies, etc. Outsourcing payroll services can also work as a boon to some as part of responsibilities delegated. The services offered by such third-party payroll servicing companies are quite reasonable and agreed to set of commitments. It should be worked out on a win-win situation for both the parties.
The HR (Human Resources) department must exist as long as the organization is there in the market. The HR department can exist independently without an in-house organization to handle; however, an organization cannot exist without a fully functional HR department. HR departments handle and take care of the company and its employees thoroughly by offering the maximum support through there HR department. Right from recruitment to exit formalities of an employee, the HR department plays a vital role in an organization. Within the HR department, the support functions are created like payroll services, recruitment teams, operations and so forth. These departments are dependently and independently responsible for handling the respective job functions. Every sub-team within each department will have a reporting manager and the reporting managers are made to report to the HR head of the department.
Listed below are the efficient, comprehensive functions and importance of a payroll team in an organization:
The team is made to adhere to the quality standards by default as every ticket raised is time bound in the fast-moving world. The HR team closely monitors the quality of service provided by payroll services team and provides timely feedback on any improvement. Everything is documented on a digital form for future references and the solutions are utilized as the knowledge database for the future supporting services. Any new process in place is documented and circulated for information as well. An approval from the change management board is captured before updating the HR policies and process.