Tips and Tricks When Managing A Company Payroll
Dealing with employee’s payroll month in month out can be quite tedious. To aid you in it, we will list down some things you will need to take note of when you are dealing with your employee’s payroll.
Remember to always pay their salary on time
In this regard, the law clearly stipulates that every employer shall pay to each of his employees no later than the seventh day after the last day of any wage period the wages, less lawful deductions earned by such employee during such wage period and that such payment must be (generally) paid through a banking institution i.e. bank, licensed or established under the Banking and Financial Institutions Act.
Do remember that an employee is entitled to voice his grievances in court if his employer fails to pay his wages on time and via a banking institution.
Some quick tips to ensure you always pay your employees on time:
- Set up a policy/ procedure to ensure that the employee’s wages are consistently paid out on the same day;
- Set up automated software to assists is the payment process;
- Ensure that if the payment date falls on a weekend/ public holiday, pay in advance.
Ensure that your employee’s data is constantly updated
It tedious as it may be, we have to remember that employees come and go – Therefore, always ensure that your human resource department (HR) is always being updated on the come and go of your employee to ensure that everyone is paid according to (accurately as possible with minimal mistake/ zero mistakes) to their salary, job title, and level, entitlement, tax rates, and deductions. Ultimately, this not only will benefit both the employee and employer (less headache when it comes to paying the employees properly i.e. when you underpay or overpay them) but will also ensure that your company complies with the relevant laws pertaining to the payment of wages to your employee.
Have a backup plan, ALWAYS!
What happens if either your employee who manages payroll suddenly quits/ goes on leave or the device (most probably a desktop/ laptop) that you use suddenly crashes and its data is not retrievable? What do you do? Are you prepared for such a scenario?
If you have neither – it is time to consider investing in backup storage (cloud storage/ external hard drive) that can be updated on a daily basis and/or setting up a proper guideline of what to do in the event the above-said employee suddenly quits/ goes on leave, as either one could ensure that your employees can still be paid on time in the event any emergency situation arises.
Remember to pay overtime wages
“Overtime” is defined as (according to employment law) the number of hours of work carried out in excess of the normal hours of work per day, and normal hours are defined as the number of hours of work as agreed between an employer and an employee in the contract of service to be the usual hours of work per day and such hours of work shall not exceed:
- more than five consecutive hours without a period of leisure of not less than thirty minutes duration;
- more than eight hours in one day;
- in excess of a spread over a period of ten hours in one day; or
- more than forty-eight hours in one week.
The law states that for any overtime work carried out by the employee, the employer must pay the employee at a rate not less than one and half times his hourly rate of pay irrespective of the basis on which his rate of pay is fixed.
And this is only the general rule. Bear in mind the Employment Act also covers other instances, such as how much should an employee be paid on a public holiday/ working overtime on a public holiday.
Therefore, always remember to pay your employee the extra wages if they work overtime, as you can be subjected to lawsuits and will be ordered to pay by the court/ fined by the court if you fail to compensate your employee for the work they did outside their working hours- overlook this at your own expense!
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