Payroll Compliance – Top 5 payroll mistakes & how to avoid them
Whether you are a start-up hiring your first staff member or a large Multinational Corporation hiring hundreds or thousands of employees annually, payroll compliance is a legal requirement and applies to every company worldwide.
Payroll compliance is defined as the combined set of activities involved in the payroll process including capturing all data, control of the data and the calculation of allowances, deduction, benefits and the net wages. Why payroll compliance legislation is important Payroll compliance is one of the largest financial obligations a company has, ensuring stringent compliance regulations are in place within your company will ensure avoidance of serious penalties, fines and potential lawsuits. Payroll compliance is more than simply processing payroll, it goes beyond making sure your employees are paid correctly and on time. Payroll compliance includes human resources, employee benefits, bonuses, hiring, disciplinary procedures, holiday, sick leave, pensions and any other benefits. When it comes to Global Payroll, Finance an HR departments must be knowledgeable of the local payroll legislation in the country employees are based. Legislation differs around the world. Payroll training covering the relevant legislation for the countries you are operating in is a worthwhile investment for any Multinational Company. Top 5 Payroll Mistakes 1) Poor record keeping Records such as taxes, income, receipts and personal data must be kept up to date and stored correctly in line with governing regulation/legislation such as The General Data Protection Regulation in the EU. Often companies store this information across several departments or across multiple staff within the business. This can lead to various risks, such as:
- Data security beaches
- Information being lost or mislaid
- Storage of out of date information
- Unauthorized individuals having access to sensitive employee information