Non-compliance with labour and tax legislation/regulations (such as paying employees accurately and on time after calculating statutory contributions/deductions) might have a financial impact – such as paying penalties. This can also impact staff morale and adversely affect your organisation’s productivity.
Here are five tips to make sure you’re always on top of payroll compliance:
1. Ensure employee info is up to date
An accurate payroll depends on error-free employee records. Ensure details like contact information, addresses, new benefits, salary increases, and promotions are updated regularly or as they change.
You can use employee self-service tools to let employees update their personal information and beneficiary details and apply for leave, file expense claims, and more. This eliminates a plethora of admin tasks for HR and payroll teams.
2. Take care of compulsory employee benefits/contributions
Every business offers a selection of benefits to employees such as paid leave, contributions towards retirement funds, medical aid, and making certain statutory payments. Companies big and small must be aware of what is required by legislation and also understand the additional non-compulsory benefits provided to employees.
3. Utilise reporting
A solid audit trail should be a feature of your payroll software. Audit trails are beneficial because they can validate any unusual payments and can track changes to a payroll. Audit trails are also helpful if there is any suspicion of fraudulent activities.
In addition to the audit trail, reports indicating variances from previous periods will highlight unusual changes made. These can be investigated further, especially if no changes were expected.
4. Get up to speed with payroll legislation
Payroll legislation is complex and changes regularly. You can keep track by watching webinars, attending industry conferences and seminars. Be careful, however, about joining social media groups to get advice about staying compliant. Instead, speak to industry experts and find out about payroll procedural changes that might affect your business.
To make things easier, consider using a payroll software provider that offers updates and advice about legislation changes. Talk to your accountant/payroll expert to make absolutely sure. They will have a clear understanding of payroll compliance and can help with any relevant changes or updates.
Payroll compliance can be more complex if your company is a multinational, as every country has its own rules and regulations regarding salaries, deductions, payments, and reporting. Make sure you understand international legislation to remain well-informed.
5. Don’t miss deadlines
Remember that it is critical to keep ahead of important dates to give yourself enough time to get things done. One way to do this is by creating a calendar to highlight important dates, including submission deadlines and when payments are due. Doing this will ensure nothing is missed, and you’re always on time. What’s more, employees will know exactly when they’re getting paid, and your team can carry out payroll tasks efficiently.
No excuse for non-compliance
As a business owner, you are responsible for ensuring you meet your legal and regulatory obligations. Ask for help and support when you need it. Stay up to speed with all legislative changes, ask questions, and attend training and webinars relevant to you. Once you have all these boxes ticked, you’ll ensure that you always remain ahead of the game.
By Yolandi Esterhuizen, Registered Tax Practitioner & Director: Product Compliance, Sage Africa & Middle East