Understanding payroll compliance is an important part of running your payroll. If you are paying employees, it’s compulsory to be PAYE compliant. You need to ensure that the tax you pay is accurate and up to date according to the latest legislation. If your business is not payroll compliant you might face large fines or penalties. So, is your payroll process compliant?
Here are a few tips to help you keep your payroll process compliant:
Keep current with payroll legislation
How do you keep up with the ever-changing payroll legislation and stay informed of any changes in the law?
A good starting point is to join a payroll association. Payroll associations always keep their members current with the latest laws and give you access to a wide range of resources. They host many webinars and training sessions. These provide your business with the opportunity to find out more about the latest changes and clarify any queries that you may have.
Always be on time
Another critical part of payroll compliance is the timely submission of information to SARS. This includes EMP201 (monthly) returns, EMP501 (bi-annually) returns and the IRP5 certificates.
You need to keep track of all essential payroll deadlines in one place which is available to all individuals in charge of payroll. That way, your entire team is always aware of what is due, and you won’t miss a deadline.
Keep up-to-date employee records
For businesses to keep payroll compliant with salary and hour laws, employers need to track employee time and information. Employee information can change, and those changes can affect your payroll calculations. Whether your employees are promoted, on maternity leave, or moving from a permanent role to a contract position, it all needs to be recorded accordingly. It may seem time-consuming at times but maintaining accurate employee records is a key part of staying payroll compliant.
Accuracy is an important part of making sure your business is compliant. Managing your payroll process manually can be time-consuming and lead to many errors costing you time and money especially if your calculations are not in line with the latest laws.
Investing in a payroll software system can help your business stay payroll compliant. The software can automate a lot of manual tasks accurately and on time. Regular software updates in the system can help businesses keep track of changing tax laws and regulations ensuring your tax calculations are always correct, helping you avoid any penalties or legal issues.
In conclusion, staying payroll compliant is crucial for any business, regardless of its size or industry. Compliance is not just a legal need, but also a moral obligation to treat employees fairly and respect their rights. By prioritising payroll compliance, businesses can create a positive work environment and build trust with their employees, leading to long-term success.