One of the things you need to have in place when you run or own a business is an optimized payroll system. It sounds like an obvious place to start, but for many businesses, this comes as an afterthought. Between 2017 and 2019, celebrity chef and cooking show judge, George Calombaris made headlines for all the wrong reasons when it came to light that he was underpaying $7,83 million in wages to 515 employees and previous employees.
This not only led to investigations and massive fines to be paid but also to the reputation degradation of Calombaris and his chain of restaurants. Whether or not this scandal was due to “historically poor processes” or not, it is best to avoid these kinds of situations by implementing an effective payroll system. Being able to deliver paychecks on time and accurately is a reflection of your brand and has a significant impact on your staff morale and therefore the financial performance of your business.
How can you optimize your payroll system?
Managing payroll effectively can be done by means of several strategies. This can include creating a payroll calendar, clearly classifying workers into payroll categories, or even outsourcing your payroll duties.
Create a payroll calendar
Payroll calendars will help employees understand when they will be paid. It also helps payroll staff with the planning and execution of their tasks. An effective payroll calendar should also simplify payment processes and reduce employee confusion as to when they will be paid.
You can set up a payroll calendar by using a regular calendar as your guide to analyze dates and to allow enough time for payroll processing. Use it to emphasise specific information such as timecard deadlines and cut-off dates due to holidays. You can also distribute the calendar to all your employees to ensure transparency.
Clearly classify workers into payroll categories
Pay schedules and scales of your employees will likely vary based on their classifications. If your employees are not definitely classified, lines between independent contractors, full-time employees, et cetera might become blurry.
Employees can be classified as full-time, part-time, temporary, or contract employees. Full-time employees are usually regarded as individuals that work between 30 and 40 hours per week. Part-time employees usually work less than 30 hours a week and temporary or contract employees are usually just hired for a specific project or period of time.
Outsource to optimize your payroll
In business, time is money. Outsourcing your payroll is a viable option for most businesses as it takes some administrative work off your hands so that you can focus on the things that are more important to the growth of your business. Outsourcing can also ensure that payroll doesn’t fall through the cracks and that employees get paid on time and that they get paid accurately.
Enslins delivers trusted payroll services that can help you with the administration of your monthly payroll functions. Our services include:
- Structuring of annual salary packages;
- Creating and maintaining a payroll database;
- Calculation of monthly payroll taxes in accordance with Tax legislation;
- Preparation and submission of monthly payroll tax liability to SARS;
- Issue of monthly payslips;
- IRP 5 Reconciliations and submissions to SARS;
- Issue of IRP 5 and IT 3 certificates on an annual basis; and
- Recording and reconciliation of payroll transactions with your financial system.
Contact any one of the various Enslins firms to learn how we can help you optimize your payroll systems and comply with the accompanying tax legislations.