How to Avoid Payroll Mistakes?
Payroll management software India
Payroll mistakes are one of the main reasons for stress for the HR department. Even one tiny mistake costs them a lot- their time, company’s money, and trust of employees. However, no matter how focused they are when processing payroll, mistakes still happen due to some reason or the other. One reason for them is changing laws and policies of employment and tax payment for the companies.
There has to be a way to avoid them, right? So, in this blog, after talking to some of the HR veterans we have assembled tips for you that we are sure will help you in reducing the payroll errors. So, let us begin!
- Stay updated with the laws and regulations- The best way to do this is to read the news daily. This is something that you should not skip at all. Just take out time to follow some websites or media publications that focus on news that matter to HR. Other option is to go to the news sections on your search engine after typing a particular keyword that you want to know about. For instance- you can type change in labor law, this way if there would be any change, you will be able to see it! Moreover, you can also check for withholding taxes, ceasing child support withholding, not calculating the fringe benefits in the right manner and underpaying the state taxes for unemployment before you process the salaries every month.
- Remember the submission deadlines always- You should always remember the deadlines for depositing the taxes. However, still, it is understandable that amidst so much of other tasks to do, you might find it hard to keep up with the dates. So, the best thing you can do about it is to use payroll management software in India that can remind you. Make sure you do your research and look for payroll software in the Indian context. However, if you cannot get one for your business in the coming time then make sure to at least set reminders. Even though the income tax department extends the date once if the changes were made by them in the end time, you should do the payments on time.
- Wage garnishments should be processed rightly- The wage garnishments include levies and support orders so the employers should track these actively otherwise the employee wage attachments withholding and remittances would not be deducted correctly. Keep a check on the official website for compliance, recordkeeping, and reporting as well!
- Don’t trust the tools blindly- Even though the payroll management software in India is automated enough to rely on. But if there is no feature to do the audit then you should no rely on the software fully. Before processing the salary you must audit everything, the attendance, the difference in salary, the overtime payment. Sure that would take time but it is essential as it will ensure no mistakes in the end. We would still advise you to ask the payroll software vendor to upgrade the software and provide this feature or else you can get another payroll software in India that has this feature.
- Make sure non-exempt employees are marked- Wage and hour audit when not done correctly, can become a cause of penalties, and even drag you to the court. Keep yourself updated with all of this, check and recheck and apart from this, and familiarise yourself with these.
- Employees are not to be treated as contract-based workers- When the employees even the full-time ones are classified as the ones working under a contract, not even a payroll software in India would be able to save you from paying the penalties. So, this is why it is better to mark employees under the right category only. Backs taxes can also be levied later if this mistake is not being corrected.
- Fringe benefits should be reported- With such benefits two treatments are to be done. Either you have to withhold the taxes or you have to report these as income as per the requirement and wage garnishment release.
- Ensure the personal details are filled- To avoid errors, make sure you communicate to the employees that their information including the UAN number, bank details, emergency number and other things should be filled correctly and that they should check the details every month. The most important thing to do is to let them know that they should change their bank details if they are changing the bank or it has expired. Otherwise, their salary would be transferred to the same old account and this won’t do good to anyone.
We hope the aforementioned points helped you in identifying your little payroll mistakes and how you can avoid them. Getting payroll software in India that can run a diagnostic check automatically before processing payroll is a boon so make sure you own an HR software that has this feature.