Page 42 - DRG HR HANDBOOK- Nikita Pillay
P. 42
PAYROLL MANAGEMENT (CONT.)
data entry work is involved. Moreover, the right payroll ACTUAL PAYROLL PROCESS
calculations, deductions, taxes, etc. can require a
Payroll calculation:
significant investment of effort if you are not specialised
Input data is put into the payroll system to process
in payroll.
the payroll. This results in net pay being generated
Various types of payroll software can handle a
after adjusting necessary taxes and deductions.
business’s payroll processing and related tax filings
After this process is complete, it is best practice
and payments. There are plenty of options available,
to reconcile the values and verify accuracy to
so you can choose the one that perfectly fits the bill for
avoid errors.
you, depending on your organisational needs. Given
Payroll audit before payment:
the complexity of the processes required, investing
in a professional payroll service is best because you A double-check process needs to be in place, and
avoid much of the cumbersome administrative and tax- an audit trial will help to eliminate errors and
related work. ensure accuracy ahead of payment.
PAYROLL PROCESS STAGES POST-PAYROLL PROCESS
The payroll process can be split into three stages: Statutory compliance:
pre-payroll, actual payroll processing and post payroll At the time of processing all statutory deductions
activities. like Employee Benefit Deductions, PAYE and UIF
Deduction and other third-party payments are
PRE-PAYROLL ACTIVITIES
deducted.
Defining policy: Payroll accounting:
It is important to establish a company’s policies Every organisation must keep a record of all
such as pay policy, leave and benefits policy and financial transactions for the payroll process.
attendance policy. Payroll management should always ensure that all
Ensure that these policies are well-defined and salary and reimbursement data is accurately
signed off by your company’s management so that entered into the company’s accounting system.
standard payroll processing can be established.
Pay-out:
Gathering input data: Salaries are paid out by bank transfers. Typically,
Interacting with multiple departments is often an employers deposit salaries directly into an
integral part of the payroll process to gain access employee’s bank account. Using payroll software
to information like attendance data.
helps generate proper employee payslips.
The process might be more consolidated in smaller
Reporting:
organisations and more robust in larger
After you’ve completed payroll for a particular
companies.
month, the finance department or management
Input validation:
team needs to be provided with reports on various
The next step is checking the validity of the input
aspects of employee costs, by gathering the data
data and whether it adheres to company
and extracting reports required.
policy. This is the time to make sure no
active employee has been missed and no DRG Outsourcing is a provider of professional payroll
inactive employee has been included in management services taking full responsibility for this
42
salary payment. non-core activity.