One of the leading reasons that employees put in their labor is to earn money. Employees need to ensure that they are paid their exact salary and timely as per the regulations of labor law and regulations. Violation of the laws can lead to serious legal and monetary consequences. Similarly, even a small error that affects their actual income or a delayed payment can toll on the spirit and integrity of employees, which eventually affects the productivity of the business. This is where the importance of effective payroll administration comes in, in the opinion of Charles Spinelli.
What is payroll administration?
Precisely, payroll administration is an integral part of overall business administration. The term ‘payroll administration’ involves all administrative jobs to calculate workforce costs and paying of salary and wages to employees. Considering employee benefits, maintaining payroll taxes also comes under its umbrella.
In large-scale companies, typically a payroll administrator or manager works in conjunction with a team along with the HR department to executive the job. However, in small enterprises, an accountant or the business owner may take care of the payroll administration tasks.
What Is The Responsibility Of A Payroll Administrator?
The responsibilities of a payroll administrator involve planning and overseeing every aspect of the payroll process. The primary tasks of a payroll administrator include
- Tracking accuracy of payroll alongside clock-in and clock-out times.
- Checking vacation time, time off, and sick leave
- Accurate calculation of paying overtime, bonus, commission, and extra payable hours.
- Payment of accurate and timely salary to employees
- Record keeping, preparation of payroll taxes, etc.
The above actions offer the payroll administrator the complete picture of how many hours each employee has worked and ensure that their pay and overtime are accurately determined. It also provides an overall view of how much money they have earned. Considering employee benefits, maintaining payroll taxes also comes under its umbrella. Tracking this data maximizes the likelihood of employees being paid correctly.
The Importance Of Payroll Administration To An Organization?
Efficiency and accuracy pertaining to payroll administration keep employees satisfied and transform into increased productivity while helping a business retain its legal standing and sound financial health. Having effective payroll administration lessens the risk of costly errors while making the business’s health vulnerable. Here’s how it benefits the establishment.
Builds Employee Trust And Loyalty
Being paid accurately and timely helps the employer by building employee trust while making them loyal and dedicated to their job. In addition, access to a payroll administrator, HR manager, and their team members helps them to get clarification of their queries about pay, dedications, benefits, etc. This is likely to mitigate employee confusion and mental strain that affects their productivity. The use of software-based payroll systems, advanced timekeeping systems, new-generation attendance recording systems, and direct bank transfers tend to add to the experience and satisfaction of employees, in the opinion of Charles Spinelli.
Complying With Employment Laws
Making errors in payroll management may expose a company to huge fines and penalties. It is worth noting that for business owners, regardless they come under federal, state, or local laws, the authorities oversee how an establishment maintains the payroll standard for paying its employees. Having effective payroll administration lessens the risk of costly errors while making the business’s health vulnerable.
Supports In Tax Compliance
It is a legal compulsion for businesses to comply with the rules and timelines regarding taxes as imposed by the Internal Revenue Service (IRS). Payroll administrators track these guidelines closely and diligently and use them as a guide for undergoing payroll processes. Non-compliance with these laws may make a company pay huge penalties and even put a company out of the industry.