You either compute payroll of your employees using pen and paper or you use specialized payroll software to get the job done- errors can still creep in at any time. Payroll errors (big or small) can do great harm to the business and they may not be acceptable.
The best way to prevent payroll errors is through investing into a comprehensive payroll software solution. Some of the payroll errors must be taken care of at all times to avoid stress and panic. The most common payroll errors made by HR professionals and account personnel are-
- Misclassifying employees
Classification of employees is crucial and is a major factor for calculating payroll and its components. Based on the classification certain employees may or may not be eligible for employee benefits such as health insurance, food or travel allowance and retirement schemes. Misclassifying employees can land you in paying huge taxes and penalties. Moreover, defining a clear mark of distinction between permanent and part-time/ contractual employees as per the state and country laws is vital.
- Overlooking Payroll Regulations
Payroll is a resultant of constant fluctuation in state and national taxes throughout the year. Payroll isn’t something that can be forgotten once initiated; instead it needs to be tracked for your company to be completely compliant with it. Do not overlook the following payroll regulations-
- Income Tax, Professional Tax and other subjected deductions at an accurate rate
- Paying company taxes at a correct rate
- Withholding amounts like childcare or medical benefits appropriately
- Skipping Deadlines
Companies may exceed the defined deadlines for paying taxes being unaware or negligent. There are different deadlines each for declaring withholdings from employee salaries, summaries of salaries paid out and reporting other critical information in audits. Be sure never to skip these deadlines.
- Wrongly stored employee data
Often the basic requirement of payroll processing i.e. the employee data may not be updated. This may cause a big blunder in company accounts. All the information about employees including the Name, Date of Joining-Resigning, Address Details, Tax Filing Number, Salary Details etc. must be updated without delay.
To ensure you are free from committing these errors, take your payroll processing online and automate it using PayWheel. It is an ideal payroll solution for Indian SMEs that has been serving many happy clients in Bangalore and whole India. More than payroll, it is also a valued time and attendance software for efficient time tracking of employees.
To learn more about PayWheel and its features, visit https://www.paywheel.com/paywheel-features.
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