Top 7 Payroll Best Practices For 2023

Payroll management has become increasingly complex as the years go by. It’s not just about calculating and paying employees; it’s about safeguarding sensitive information, complying with regulations, and ensuring accuracy.

Welcome to the future of payroll management, where efficiency and security reign supreme. As businesses adapt to the ever-evolving landscape of the global workforce, mastering the art of payroll has become more crucial than ever. 

In the year 2023, it’s time to embrace a new era of streamlined processes, cutting-edge technology, and expert guidance. From standardising systems with software to fortifying digital security, this guide will take you on a transformative journey towards payroll excellence. Get ready to unlock the secrets of success as we delve into the top payroll best practices for the year ahead.

What Is Payroll?

Payroll is basically the process of calculating and paying employees for their work. It’s like a system that keeps track of how much money each employee should receive based on factors like hours worked, taxes, benefits, and deductions.

Here’s a simplified breakdown of how payroll works:

1. Tracking work: Employers keep a record of the hours worked by each employee. This can be done through timesheets, clock-in systems, or other methods.
2. Calculating earnings: Once the hours worked are recorded, the employer calculates how much money the employee has earned based on their hourly rate or salary.
3. Deducting taxes: Taxes are amounts of money that need to be paid to the government. The employer withholds a portion of the employee’s earnings to cover income taxes, social security contributions, and other applicable taxes.
4. Accounting for benefits and deductions: If an employee has benefits like health insurance or retirement contributions, those amounts are taken into account and deducted from their earnings. Other deductions, such as for loan repayments or child support, may also be subtracted.
5. Paying employees: Once all the calculations are done, the employer transfers the net amount (the employee’s earnings after deductions) to their bank account or provides a physical paycheck.

Overall, payroll is important because it ensures that employees are paid accurately and on time. It also helps businesses keep track of their financial records and comply with tax and labour laws. Some companies choose to outsource their payroll to specialised providers to make the process more efficient and ensure compliance with all the legal requirements.

7 Payroll Best Practices For 2023

Due to popular demand, we have organised the 7 best payroll practices for 2023.

1. Standardise systems with software

It is crucial to create a handbook or manual that outlines all the important steps and details of the payroll process. A company must document each step of the payroll process in a guidebook. This makes it easier to review and understand. If all the knowledge about payroll is stored in people’s minds and not documented, it can create a big problem when those people leave the company.

Moreover, having a well-documented payroll process is like having a key for new hires joining the payroll department. It helps them get up to speed quickly and feel like they have the recipe for success. They won’t have to scratch their heads or feel overwhelmed to get started.

Now, if you’re still manually calculating your payroll, it’s time for a reality check. It’s like using a typewriter in the age of computers. Most businesses nowadays want to use their own software, even if they rely on a third party to pay their employees.

Standardising the payroll process with software, and documenting the steps from start to finish, will make your business run smoother and more efficiently. It will create an easy-to-follow roadmap for any need.

2. Plan for the hard deadlines

Regardless of what you might believe, the Government has its eyes on your business. They have strict rules and regulations regarding when companies should submit important payroll documents like pay stubs, retirement statements, and tax forms. You don’t want to mess with these deadlines.

To avoid any unpleasant surprises and keep the government off your back, it’s crucial to stay on top of all the submission dates. The good news is that these dates are usually known well in advance, so you can plan ahead and avoid any last-minute chaos or heart-stopping realisations that you’ve missed a crucial deadline.

This comes with the territory of strategic planning. Ahead of time, figure out each standard date you need. Put these on your calendar and begin planning for them. Planning ahead will save you headaches by Standardising these requirements.

Whether you’re a small business owner or a payroll team leader at a big company, everyone can benefit from setting reminders for these crucial payroll and tax deadlines. Remember, the deadlines may vary depending on your country’s payroll laws and your specific payroll schedule.

3. Understand international needs 

International payroll is like stepping into a diverse and colourful tapestry. Just like the landscapes and cultures vary from place to place, so do the rules and regulations surrounding payroll. It’s like having a whole bunch of puzzle pieces.

Similarly, labour laws will vastly vary from nation to nation, state to state, and so on. Two employees in Europe or the USA will have very different needs based on where they are located.

With how large international employment is, employers will need to know tax and labour laws for many countries all around the globe. For hundreds of jurisdictions, though, it may be easier to work with outside help.

Paying employees isn’t just about giving them a paycheck. There are other important things to consider, like taxes and social costs. Each country has its own requirements for these things, and international payroll processing firms help you keep track of it all. They make sure that the right amount of taxes and other costs are deducted from each employee’s pay so you stay on the right side of the law.

4. Sort out international payment options

Paying international employees is not as simple as sending a direct deposit. As nice as that sounds, it is simply not a reality. Banks will largely not allow a transfer such as this across international borders. 

Even within similar standards, such as the European Union, banks may not have the capabilities to pay workers across certain national lines. Wire transfers are costly and slow; meanwhile, many digital payment processors are expensive.

Various types of international payment experts are here to help. It does not need to be costly and slow. These firms take care of the complicated stuff so you can focus on running your business smoothly. They help you navigate the complexities of paying employees in different countries, ensuring you comply with all the necessary laws and regulations.

4. Digital security

In today’s modern world, digital security is vital for success. Whether it be for a local company or an international conglomerate, security is not negotiable. Companies need to modernise their security protocols when it comes to payroll processing, given how much sensitive information is at their fingertips. In this fast-paced digital landscape, where cybercriminals are constantly evolving their tactics, staying ahead of the game is crucial.

Payroll processing involves dealing with a wealth of confidential data: employee names, addresses, social security numbers, banking details, and more. It’s like having a vault filled with priceless jewels. But here’s the catch: in this digital age, where everything is interconnected, and information is a valuable currency, you need to fortify your defences and protect that treasure from potential threats.

5. Standardise approval process

The approval process for payroll is always a challenging one with loads of grey areas. To get ahead of this slow-moving facet of the business, one must prepare ahead of time. Take a good look at the budget, schedules, and pay periods. 

Create like having a map that guides you through the payroll maze. Understanding your financial boundaries and time constraints will help you navigate this process with ease. Think of it as building a solid foundation for your payroll process. It’s like constructing a sturdy bridge that takes you from confusion to clarity. With everyone on the same page, the process becomes simpler and more efficient. 

6. Secure record keeping

Payroll records must be kept tidy and stored securely. In this digital age, employers are given loads of sensitive knowledge about employees. This information must be kept for decades. Like a bank vault, it must be sealed tight while also being organised.

With layers of security measures, like firewalls, encryption, and access controls, you ensure that only the chosen ones have access to this valuable information. Unsecured data can bring down an entire company. Be proactive on digital record security.

7. Lean on experts

There are industry-leading experts who are happy to assist with all of these tasks. Ultimately, a company needs to act safely and efficiently so that it can grow. Payroll can often be an aspect that can slow down the process.

To act in an efficient and safe manner, outsourcing some tasks will make the company run at a better pace. Payroll, digital security, timekeeping, overseas pay; all of this ca be done by a time of highly experienced experts. 

By outsourcing your payroll to specialised providers, you not only streamline your process but also unleash a whole new level of digital security. It’s like fortifying your defences with state-of-the-art technology and a team of experts standing guard.

Need Compliant Payroll? Work With WhiteFin

With the help of industry leaders such as WhiteFin, payroll in today’s digital age offers businesses the opportunity to streamline their processes while benefiting from enhanced digital security measures. By entrusting payroll to specialised providers, businesses can reduce errors, lower costs, ensure compliance with regulations, and focus on their core operations. It’s a powerful partnership that simplifies complexities and empowers businesses to thrive.

It’s time to get in touch with our payroll specialist team. They will work tirelessly to make your payroll process smoother, hassle-free, and more secure. With WhiteFin in your corner, you can propel your business toward success.