5 Payroll Compliance Mistakes Businesses Cannot Afford to Commit

Employee delight is one of the most important focus areas for any business today. Right from the time a company hires the first bunch of employees, it becomes crucial to keep the workforce motivated. One of the biggest motivations for any employee is to get the right salary paid at the right time. It ensures that they don’t face any challenges in managing their personal finances since they have bills and EMIs to pay as per a fixed schedule.

However, the processing of payroll is a complicated and time-consuming task, and that’s where businesses located in Australia and other countries struggle to ensure accuracy and timeliness. Payroll processes are often manually operated which makes the task difficult for the HR personnel or payroll teams. There are a number of payroll errors that businesses often end up making, which adversely affect the company’s reputation and growth.

Here is a list of five payroll compliance mistakes businesses cannot afford to commit: 

Inaccuracy of data recording – Manual recording of data such as employee timesheets, calculation of deductions, benefits, overtime etc. can lead to errors and inaccuracies, which can further result in wrong salary payment. That can be a cause of great displeasure to the employees if they get underpaid, and loss for the business if they are overpaid. 

Wrong employee classification – Wrong classification of employees especially when they are recently promoted or given a salary hike during the month and their salaries and deductions change as per the change in classification. Amidst all this, if the payroll is processed as per their earlier category, it becomes a problem. Similarly, documenting part-time or freelance employees as regular workforce can also lead to compliance issues. 

Delays in processing payroll – Nothing negatively affects an employee’s morale more than not receiving the salary or benefits on time. If the delays are repeated then it can lead to the employee becoming disenchanted and leaving the company as well. These delays are often caused by multiple factors such as delays in accessing timesheets and calculation of wages and benefits or problems with the bank. 

Wrong calculation of benefits – In larger enterprises, salaries are often processed accurately, but the employees still face challenges such as wrong calculation of overtime, incentives, vacation pay, transport payments, other benefits and reimbursements etc. However, every single error can snowball into employee dissatisfaction if not addressed quickly and accurately. 

Taxation errors – Taxation is subject to stringent regulations and any errors of filing taxes and reporting the same to ATO can affect the credibility of the company. Further, these errors can also lead to penalties and legal issues which are best avoided. 

How to avoid the payroll compliance errors 

We are living in a world driven by digital technology and payroll errors can be easily eliminated by using a cloud payroll solution. You can deploy a world-class payroll system and get rid of these challenges. Most of the leading international SaaS companies and payroll outsourcing companies would offer advanced cloud payroll solutions that can be licensed to be used by internal payroll teams or as a payroll outsourcing service. 

Before choosing the cloud payroll solution for your company, you need to check if it offers features such as:

• Online payslips
• Automated tax calculations
• STP compliant
• Create rules based on modern awards or Enterprise Bargaining Agreements (EBA)
• Integrated, cloud
• Scalable
• Local tech/support team
• ATO certified
• Superannuation processing
• Parallel testing
• Transfer of current payroll and staff data
• Regularly updated in line with local regulations
• Global/multi-country payroll

When you use such cloud payroll software, you can seamlessly and accurately manage payroll for your distributed workforce across Australia as well as other countries. The ideal solution would also offer multi-country, multi-linguistic employee self service option in languages such as English, Chinese, Vietnamese, Thai, Bahasa Indonesia, Japanese, French, Spanish and Arabic. Go ahead and delight your employees with robust and well-integrated cloud payroll system today!