Basic Payroll Process, the Challenges and More!
June 20, 2021
Payroll is the details of the basic salary, taxes and benefits, such as insurance; it is the compensation a business must pay to its employees on time.
Experienced payroll outsourcing service providers that have extensive knowledge in different fields will bring company many benefits.
What is payroll?
As one of the most important processes to operate a business, payroll is the details of the basic salary, taxes and benefits, such as insurance; it is the compensation a business must pay to its employees on time. Those in charge of doing payroll are also responsible for developing welfare policies as well as processing paychecks or calculating and paying the taxes, like personal income tax, on behalf of the employees.
Basic payroll process and common challenges
A typical payroll process consists of three main stages:
- Before salary calculation: setting up policies, tracking any overtime, verifying the number of working days, leave days and assessing the level of product/target achieved. HR professionals also have to collect employees’ personal information relating to payroll, such as tax code, benefits packages, etc.
- Salary calculation: calculate salaries, wages and bonuses based on all documents related to the employee’s pay and the company’s policy. Also, HR professionals have to guarantee their payroll process complies with the labor law & regulations.
- After salary calculation: before preparing paychecks for employees, it is necessary to deduct taxes and insurance as prescribed by law; at the same time, keeping payroll records according to the business accounting system.
However, potential risks and problems are always present and often occur due to having a large, complex workforce that requires an investment of time and money for the payroll process. For example, many companies have at least two types of workforce: expats & local labor, some may have temporary contractors who work based on projects, or employees who work in factories/ offices, etc. Moreover, legal risks or data loss risk also cause certain worries for businesses.
Outsource payroll processing services is the solution
Finding experienced payroll outsourcing service providers that have extensive knowledge in different fields will bring benefits such as:
- Save time and resources: with their inclusive skills and knowledge in payroll services, they provide businesses with time to focus on more important matters, such as their goals and commitment.
- Limit legal risks: consultants are always up to date with the latest legal updates, as well as understanding about market practices to help organizations stay ready for any possible issues.
- Information security: to ensure the payroll process is carried out securely, especially when it is online service, or E-payroll, the payroll service providers have reputable and reliable security systems, together with anti-intrusion tests and strict prevention plans.
- Additional services: Service providers are always ready to give advice and offer solutions if there is an unexpected problem in labor management, or even help update new laws and regulations regarding the payroll service.