Why is it essential to streamline your payroll?
By streamlining the procedure, the business can increase compliance, decrease processing times, and clarify job responsibilities. Furthermore, it allows companies to assign tasks to the employees that add value to their operations.
If there is no streamlining, every organizational process will take a longer time to finish. However, you might be able to avoid the pitfalls of manual and ineffective processes by streamlining HR procedures. Insufficient and inconsistent data, payroll and benefit mistakes, and tax errors are examples of these pitfalls.
Research says, a company with 10 employees paying the average North American annual salary will lose $2,353.00 – $4,706.00 a year in payroll mistakes. Payroll costs include benefits, taxes, fees, and other expenses. Consequently, payroll processes need to be simplified to reduce overheads, improve productivity, and keep the process running smoothly.
To simplify your payroll procedures, follow these 5 easy steps:
1. Take a look at your payroll policy.
From hiring to offboarding, you don’t need to address each step in detail when improving the payroll process.
Identifying areas for improvement can be challenging. A thorough review of the employee journey, though, may help you identify opportunities for improving efficiency and automating processes.
The following elements of your payroll policy should be reviewed:
- Recruitment and job postings
- Assisting new hires and training
- Pay Scales and benefits offered
- Participation and timing
- Monitoring the performance of employees
- Dismissal and retirement
2. Use an automated system to process payroll rather than a paper-based one.
A crucial component for any company is payroll. It gets more crucial as the company expands. Therefore, investing in trustworthy payroll software and automating the entire process is worth it. Experts say contemporary businesses should prioritize innovation over worrying about non-core tasks. Furthermore, incorrect and delayed paychecks are two of the major issues with subpar payroll administration procedures.
Employing web-based technology, an automated HR and payroll system helps managers create, implement, and manage payroll policies. Both employers and employees benefit from it due to technological advancements and improved services.
3. Create payroll checklists.
Keeping up with tax and payroll regulations might seem challenging. It will, however, greatly improve the efficiency of your payroll process.
Employing checklists and creating them will help minimize errors in your employee payroll administration processes, regardless of whether it has been automated. When you use a checklist, you can identify what is crucial and what else needs to be done for a challenging procedure. Ideally, you will recognize unnecessary high expenses.
The main purpose of your checklist is to let you know what is and is not necessary. The checklist should be audited frequently to ensure accuracy and legal compliance, this will save you a lot of money and fines. Manage payroll for your employees with the assistance of a specialized individual. By doing so, you can identify mistakes and fix them before they become costly.
4. Observing employee activity.
For the HR department, keeping an eye on employee activity has become crucial. They must do it to keep track of their login times, work schedules, overtime, and leave requests.
To make sure you are getting the right information from your employees, you should speak with your accountant, but generally, you need to ask for:
- Name, Address, and Phone
- The Social Insurance Number (SIN, is a nine-digit number that allows you to work and receive wages in Canada).
- Date of hire
- Date of birth
- Deductions
- Sums that must be paid
- Paid in (salary, hourly)
- Virtual timesheets (if you are using a timesheet management software)
Additionally, you might need to gather data regarding RRSP deductions, banking details (for direct deposit), vacation accrual, or source tax payments.
5. Hire a payroll service provider on the side
The simplest way to simplify your payroll process is to hire a payroll service provider. When you outsource payroll, you give it to a specialist who will handle processing employee paychecks on your behalf.
Additionally, it will increase payroll accuracy, giving you comfort. Payroll will be finished on time, giving you more time to focus on your main business activities.
How to setup payroll in Canada:
It’s crucial to set up payroll for a startup or expanding business. The simple steps listed below will assist you in managing payroll in Canada:
Registration with government agencies.
You require a functional Business Number to manage payroll in Canada (BN). The Canada Revenue Agency is the place to get it from (CRA). Your company is identified by a business number with the federal government. The next step is to register with Workplace Compensation. If your company is located in Ontario, you must register with the board within ten days after hiring your first employee. You can do this within your province depending on your regulations. For health tax remittance, you must also register with the Ontario Ministry of Finance.
Computation of tax deductions and wages.
The amount you pay each employee before any deductions, such as taxes and retirement contributions, is known as their gross wage. Taxable benefits must also be taken into account when calculating gross wages. Federal income tax and provincial or territorial income tax are just a few of the deductions made by the CRA from employees’ pay.
Payroll reconciliation and issuing of paychecks.
You can balance your current payroll with the payroll that is recorded in your general ledger by using payroll reconciliation. It assists in preventing payroll errors from happening. This guarantees that the payments made to your employees are as accurate as possible. You can either send employee paychecks directly or via payroll software after correcting any errors.
Final Reflections
Making payroll more efficient is easier said than done. It takes a lot of time and money. But unquestionably not more expensive than payroll errors. When streamlining your payroll, many individuals and factors come into play, including employees, banks, and tax authorities. At first, things might seem challenging. But once you’ve simplified your payroll, you’ll notice how well your company is doing.
We at Transcounts can assist you in determining whether your payroll procedures make sense and where there might be areas for improvement. Call us right away to schedule your free consultation.
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