INRODUCTION TO PAYROLL MANAGEMENT.

Payroll can be referred to the process of paying employees. "Payroll is referred to the total emoluments paid to an employee in consideration for services rendered to the employer". It is very important for organizations to systemize the quality of their payroll output. This is to enable the team handling the payroll functions avoid errors and other risks that could affect the employee's negatively.

Paying your team requires making the right deductions and allowances. More importantly, payroll and it's related costs must be accounted for appropriately. Statutory deductions must be remitted within the Government approved times lines (7 days after salary has been credited) and the right documentations maintained to ease payroll reconciliation and auditing.

The features of a good payroll management system relies on clearly written and specific documents (OFFER OF CONTRACT) which contains a list of the employee's remuneration for services rendered to the organization. It also provides a summary of the entire emolument paid to the employee within a specific period.

A payroll system entails the following:

✔The company's remuneration strategy which includes leaves, deductions, bonuses.

✔ It also entails detailed salary and wages breakdown.

HOW TO PROCESS PAYROLL:

✔ Calculate payroll taxes- Here you calculate tax (PAYE) using the new finance at 2020.

✔Determine deductions- Statutory deductions are therefore calculated. The common deductions are Pension, NSITF, NHF, PAYE, ITF (This deductions are dependent on items your company deducts). You will also consider loans and other deductibles.

✔Calculate net pay- After all necessary deductions have been made, whatever is left constitutes the net pay of the employee.

✔Get approval of the payroll- After the necessary checks and double checks in order to avoid having payroll errors. It is important to get the payroll approved.

✔After all approval have been sorted out, you can now send the approved schedule to the Account/Finance team for payment to various employee account.

✔Payslip is issued to all employees through their official email after salaries have been credited. The payslip typically shows the gross salary, deductions made from the gross salary and the net pay to the employee.

I will continue on the risk associated with payroll on my next post.