Payroll mistakes can hamper your organization. One irregularity is enough to affect the employees’ morale; this will have a direct impact on productivity.
An account manager is responsible for ensuring that the payroll processing is done accurately without any error.
Here, we will see what payroll processing is and what an account manager should do for the accurate calculation of payroll.
What is payroll processing?
Payroll processing is a function in which employers pay their employees, file these reports and pay employment taxes to the HMRC.
Businesses with employees must have a payroll management process in place without fail.
The company can pay employees accurately and on time without fail with a proper payroll in place.
The payroll process may seem simple and easy to handle. However, it becomes complicated when various deductions come into the picture.
Employers should have a clear idea of how to process the payroll, withhold taxes from the paycheck, and ensure that these taxes are paid on time to HMRC. They are also responsible for the deduction and payment of insurance premiums and should take care of depositing funds in the pension accounts.
Payroll management comes with a set of risks and stress for business owners. If you miss a deadline or file taxes incorrectly, you have to pay fines. To avoid all of these issues, the account managers or accountants should have a proper payroll processing plan in place.
Here are some of the tips to make it possible.
Process the payroll ahead of time
Have a payroll schedule in place. This way, you will have enough time to process the payments. If there are any errors, it would be easy to correct them beforehand. You can start this process 2 or 3 days prior to the date of salary disbursement.
Update employee records
If it’s needed, make changes to the employee’s payroll record.
This includes changes in address, payroll deduction changes, such as income tax form rates, allowances and voluntary deduction changes, like health and pension contributions.
Look out for any changes in the PAYE codes by HMRC. HMRC usually pushes through these to your payroll software. While you are at it, enter the information of new hires if you have any in the current pay period.
Compute timekeeping data
Check the timekeeping data from timesheets and cards. Enter the hours that are needed to be paid, check the vacation hours, overtime, etc. Having all these data in hand will make the processing easy.
If there is a computerised timekeeping system in your organisation, then you can just import the time into payroll software. You just need to ensure that the timings are transported correctly. Make sure to do the edits correctly if required.
Prorate pay as required
If any salaried employee from your organisation has been resigned or terminated before the pay period ends, then you can prorate that person. Ensure to enter the stop date in payroll software if you are using any so that it won’t pay in the future.
If any new employee joins in between the pay period, you have to prorate their salary too.
Produce and distribute payslips
Make sure to give your employee the payslip. It should include gross and net pay, deductions, the hours they have worked in a pay period.
Payslip may also include their tax code, National Insurance Number, their pay rate, pay and deductions in pay.
You can be able to produce payslips using payroll software. These days, because of data security reasons, employers give employees limited access to and download their payslips directly from the payroll software.
File reports on time
The payroll is taxed on a monthly basis, and you have to pay tax as well as national insurance that you owe to HMRC.
HMRC will send you a late filing notice if you haven’t paid. Remember that they can charge you with a penalty if you don’t provide a valid reason for this late reporting.
Missing, incorrect or late payroll reports can also affect your employee’s Universal Credit Payments. Hence it is important to have the right schedule for the payroll dates and also keep an eye on the bank holidays as it can impact the closing.
Keep payroll records
Have physical payroll registers available all the time. They should contain employees’ gross to net wages. Keep it in a confidential storage area. You should have them for a minimum of three years and also store the timekeeping records along with these.
Consider the minimum wage
The National Living Wage and National Minimum Wage are legally changing and binding frequently. Payroll National Living Wage is the hourly rate to which aged over 25 employees are legally entitled.
The National Minimum Wage applies to employees who are between school-leaving age and under the age of 25.
Keep up with all payroll regulations
Staying on top of payroll regulations can be challenging because they continually change.
The cycle to work scheme, the gender gap and real-time information are only a few examples of how social influences can impact payroll legislation.
To keep up to date with payroll legislation, you can take advantage of resources from HMRC.
Use a payroll software
Juggling with the payroll tasks is sometimes a big headache.
But technology can help you with this. There are software solutions that use automation, smart data and connectivity to save you time on manual data entry.
By using payroll software, you can generate reports quickly, reduce errors and maintain compliance.
Payroll software can simplify your payroll operations so you can focus on other strategic tasks of the account manager.
Overall, efficiency is crucial when it comes to processing payroll, whether you are handling the task yourself or hiring an accountant in Canary Wharf .
As per the increasing demand for businesses to perform complex tasks, automation can offer a way to save time in doing payroll tasks.