Payroll compliance is not as complicated as one thinks. If you know what to do, you will ensure that your company does not incur any penalties. Tips and tricks are what gets us through our daily lives and what good would those be if not making business and following tax laws a little easier for us.
Just like those self-help and home living tips that we use in our personal lives, in business these tips can help you explore how to avoid expenses and keep yourself and employees happy. Here are 12 of these tips to avoid your penalties:
1. Keep accurate personal records
Records, records, records…
A word we hear all the time in business and when said multiple times becomes lost to meaning but in relation to compliance, this word holds a lot of value because it is what makes the company and its filing credible. Your records are breadcrumbs that you can use to go back and forth in time whenever your need and these allow you to compare your company past and present.
Every change with the employee, from promotion to personal details need to be processed immediately and correctly so that it upholds the credibility of the company and is the basis of every payroll. Every employee record also holds this breadcrumb trail because it can be used to trace their personal successes and progress and their progress in their personal which is very important during audits and appraisals.
2. Manage employee expectations
As the employer, one needs to ensure that your employees understand how to remain compliant. You need to outline and highlight important policies that your employees need to adhere to (such as your company HR & data privacy policies, which should be linked with your local labour law).
You need to explain to your employees the importance of correctly documenting expenses so that the company records remain accurate.
3. Use audit trails
Your audit trials are the footprints in the sand to your business transactions and contribute to your credibility. Keeping clear audit trails helps you to record your purchases and validate them with documentation such as invoices. These trails help you to guard yourself against fraud and maintain accurate accounts by indicating any discrepancies between periods and provide a perspective about how well your company is performing.
4. Stay updated with the legislative changes
Do you have a centralized internal legal framework as part of your payroll process documentation? It is imperative to have clear processes in place to ensure you constantly keep up to date with any legislative changes in labour law, which as we know these can change on the tip of a dime, and come into effect immediately, and directly affect your payroll, and failure to keep compliant with them can result in fines.
5. Follow data security laws
Your employees are the backbone of your organization and as such place trust in you that the information they have provided is always secure. This protection of employee data is placed under strict legislation, such as GDPR (yes, it does apply in the Middle East and not just Europe) and as such, needs to be followed to the letter. You need to spend time in ensuring that your data protection systems are always at optimal functionality at every step of the process.
6. Keep to your deadlines
Deadlines are essential in payroll compliance. Having these notarized can help you to carefully prioritize your tasks and avoid you incurring penalties for late payments. One way that you can always be aware of these dates is to have them in a clear payroll calendar that is determined and agreed upon by all payroll stakeholders at the beginning of the year. By doing this, not only are you reminded of when your submissions are, but it also helps your payroll team to carry out tasks more efficiently in accordance with their clear deadlines and lets your employees know when exactly they are going to be paid.
7. Speak to an expert
Just like in life, we often need the advice of someone more experienced than us when we embark on a journey or take up a task that we feel we need more guidance about. When you speak to experts in the compliance field, not only can you achieve a broader understanding of compliance and what needs to be done, but they will share with you their tips and tricks about how you can retain your conformity and not have any unwanted issues.
9. Move to a self-service module
The payroll team already has quite a lot in their basket and do not need to chase the employees for every piece of data about their work, instead, implementing a self-service module allows the employees to enter their requests immediately and managers to approve on the go, instead of a having countless email chains and fumbling around to find the information to input your variable data during payroll. Doing this helps you to eliminate miscommunication, lost and falsified data and allows you remain completely compliance.
9. Make a compliance checklist
Checklists are a way of life; they allow us to keep track of our activities – especially when we have a lot to do – and have set goals for a day. Having a compliance checklist can have the same effect because with it, you can list down all the activities you need to do and data you need to gather, thereafter, you can plan out your tasks and confirm if you have done every step in the process.
10. Understand compulsory employee benefits
Every country in the Middle East comes with a list of compulsory benefits that need to be offered to all employees. Some of these are less obvious than others. Along with this, you will also have a list of employee benefits you may provide as part of your HR policy. Ensuring your employees receive these benefits is your legal duty as their employer, if you do not, you are going against their contractual agreement, and therefore breaching the law.
11. Automate your payroll process through software
Technology has made our lives easier and can make your compliance process easier too. By automating, you are eliminating as much the possibility of human error and guaranteeing that all your procedures are followed, and all your necessary payments are made because you would have already entered this data into the system and when the deadline approaches, the automated system processes all the necessary tasks.
12. Consider outsourcing your payroll
While automation and speaking to experts is a great way to ensure that you remain compliant, outsourcing your payroll means also outsourcing your compliance and through this, you get to avoid the penalties that may happen if you miss a step in the process.
There you have it, your compliance cheat sheet and you are on way to a perfect payroll process with no issues or penalties. Using these tips will definitely make your process easier and retain the credibility of your company and guarantee the satisfaction of your employees.
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