7 BEST PRACTICES FOR MANAGING EMPLOYEE PAYROLL

15th April 2022

Payroll managementis a method for processing employee paycheques (salaries, bonuses, and deductions), thus adhering to labour laws and keeping proper records. Payroll is one of the most important (but also one of the most despised) duties in any HR department. The collective payroll "cheque" is not only likely your company's largest expense, but it also goes to your most essential payee: your team.

Payroll processes that are efficient and effective keep your company's finances on track and add to employee happiness. Your employees don't only deserve correct, timely pay for all of their hard work; they and their families rely on it.

Many organisations, on the other hand, struggle to handle their payroll services effectively. Even small businesses find the payroll procedure difficult. So, what exactly is the problem here? While a business is just getting started, manually managing the records of a few employees may be simple.

However, as operations and members expand, manually collecting, maintaining, and processing payments are no longer a viable alternative. It begins to take more time, and the procedure of processing payments and submitting taxes becomes more complicated.

Payroll can be a pain in the neck. Fortunately, it's a beast that software can assist in taming. Payroll software evolves every year as cloud technology and regulatory standards advance. This can make selecting a payroll service challenging.

You need to know not just which payroll software is the best, but also how to use payroll software effectively in your firm. Businesses should understand how to manage payroll properly since it has a direct impact on their financial health.

7 Payroll Best Practices

1. Abandon The Paper Trail For Digital

Did you know that all records related to an employee's payroll and taxes should be kept for at least three years? That's a lot of paper, even for a small business.

You can get rid of all those filing cabinets in favour of digital documentation and paperless payroll with the correct payroll software. It's not only more efficient in terms of space, but it's also more precise and searchable.

2. Direct Employees To Direct Deposit

Both you and your employees’ profit from direct deposit. It saves you time and money by eliminating the need to write and print cheques. It saves them time and decreases the chance of misplacing a cheque. It's another step toward a paperless HR process that will benefit all parties involved.

Encourage your staff to use direct deposit if they haven't previously done so. You can also utilise your program to show folks who are apprehensive on how simple it is.

3. Be Transparent

Payroll should not be a mystery, but many employees are hesitant to discuss it. As a result, there are numerous unsolved questions and issues. Transparency about your payroll process is critical in combating this problem and ensuring that everyone in your organisation understands theirs and your roles.

Payroll software makes it easy to write down your processes because it automates them rather than the "First I open an Excel spreadsheet..." processes of the past. Your staff will be able to reap the benefits from a more streamlined, accessible, and organised system.

4. But Still, Be Confidential

Payroll transparency can improve your employees' connection with HR significantly. Individual employee wages, and other financial information, on the other hand, should always be kept private.

Payroll software organises this data into a digital database, making it far more difficult to undermine the information's security.

5. Classify Correctly

You must know the kind of employees you have in order to provide and file the appropriate tax forms. Do you have a full-time employee or an independent contractor on your hands? Make sure you're classifying your staff appropriately; many businesses do it incorrectly.

The proper classification of employment in the employment structure according to the standards of employment classification in Malaysia (MASCO) can be found on the official MyGovernment website.

Payroll software simplifies the process of keeping track of employee classification and makes recording hours easier than before.

6. Tax On Time

As much as they dread tax season, your employees are on the watch for vital tax information to start the refund process.

For instance, taxes must be cleared and filed at year-end before April. In Malaysia, the financial year runs from 1 January to 31 December, so employees have to stay on track in completing their obligations.

On top of this, Employers must pay attention to things like income tax rates and withholding tax deductions that must be sent to the Inland Revenue Board (IRB) of Malaysia on behalf of employees.

Any mixing up of documentation or mistakes caused by human error can lead to delays in tax proceedings and many other problems.

By automating the system or even going paperless using a payroll software, you can ensure that everyone receives their paperwork on time.

7. Get Up To Speed

When new employees start working at your company, they bring a mound of documentation with them. It can take some time to get new team members up to speed on your company's numerous HR processes, but a payroll software can help.

You can use your tools to implement stronger criterias and greater automation, reducing the time and effort required to train new staff.

8. Get Proper Training In Payroll Management Services

Payroll administration is a dynamic procedure with many factors to take into account. HR professionals must stay current on the most critical aspects of their jobs. They must stay on top of technological advances, changing HR department needs, and a variety of other relevant services.

Payroll processing in Malaysia, for example, is subject to a number of compliance regulations. To effectively provide payroll administration services, an HR professional will need to keep track of all deduction regulations, arrange income tax obligations, and manage statutory contributions like EPF or SOCSO, among other things.

9. Outsource Your Payroll Management Services

Many people are surprised to learn that outsourcing payroll administration services are a cost-effective choice. Outsourcing payroll services makes sense if you don't have the time or finances to invest in a new payroll system. It is preferred by not just small businesses, but also major corporations.

To begin with, the cost savings outnumber the investment. Second, a payroll service provider will understand how to manage payroll operations accurately and efficiently, saving you time. However, finding the correct payroll service provider is equally vital.

10. Solicit Feedback About Payroll Procedures From Employees

Never take it for granted that your staff is fully aware of your company's payroll procedures. Make it a point to ask questions and encourage your colleagues to do so as well. Communication will aid in the identification of areas of misunderstanding, such as incorrect timesheet filing or concerns with timecard usage.

When you invite suggestions for improvement, your employees will be more likely to support you after the improvements are enacted. Begin by convening an all-staff meeting to discuss payroll difficulties.

Employees will most likely want to participate because the process affects everyone. In this discussion, ask employees what aspects of the payroll process they like and what areas they think may be improved.

You could be astonished by the unique ideas that come your way. You should also consider conducting a company-wide poll to gauge employee satisfaction with present practices.

Win-Win Financial Solutions By EVOLET For Employers And Unbanked Workers

For good reason, companies all around the world employ global e-wallets. Employers who pay their staff with cash face several challenges. Because of their cash-based wages and lack of access to banking institutions, their employees confront a plethora of problems.

So, here’s the solution!

EVOLET is a global e-wallet that may address both parties' issues while also adding value to their lives. EVOLET is a safe digital wallet that offers several additional services in addition to traditional banking.

EVOLET’s Employee Salary Management System

EVOLET provides simple tools to make your wage payment system even more seamless, efficient, and frictionless. Employers' wage management is handled by the application's built-in payroll administration system.

Employers gain from a simplified process flow that incorporates quick reconciliation, backup, and record keeping. As a result, the risk of payment data loss is reduced, and human computing errors are eliminated. For all parties concerned, EVOLET's wage management solution makes it safer and faster.

It removes the need for employers to withdraw funds from the bank, lowering the danger of robbery or theft. This is also true for employees who send money home to their relatives. Every month, this task can take up to half a day.

EVOLET offers easy-to-use tools to make your salary payment system seamless and efficient. In Malaysia, many migrant workers, both documented and undocumented, struggle to open a bank account.

Because their countries have been red-flagged by Bank Negara, certain nationalities find it impossible to create bank accounts, even if they have work licenses and visas, according to Johnson Yu, the creator of EVOLET.

Many migrants face a language barrier because they are not fluent in Malay or English. The EVOLET application has been transcribed into 12 different languages for ethnicities such as Nepalese, Bangladeshis, Filipinos, and Indonesians, who make up over 60% of Malaysia's foreign workforce.

EVOLET is a digital wallet app for migrant workers.

Learn more at https://evolet.io/