Payroll Mistakes to Avoid During the Payroll Process
As a multitasking company owner, you know that DIY payroll processing is nothing short of a torcher. Also, it can lead to severe payroll mistakes.
Payroll mistakes can put doubts in the minds about your credibility as a business. They can harm your relationship with employees.
You can avoid them from happening by outsourcing your payroll in Singapore. However, here is a list of payroll mistakes you should avoid that you should know.
7 Payroll Mistakes You Should Avoid
Itemised Pay Slips
As per the Employment Act, you must generate and issue itemised pay slips to your employees. These slips must give the essential details: basic salary, allowances, overtime, and deductions. It should also cover the payment date, salary period, annual leave, etc.
Error in Classifying Employees
Making an error in classifying your employees is a grave mistake. It can lead to inaccurate withholding tax. It lays you wide open for fines and penalties.
You should always keep employee data updated.
Whether you are processing payroll for a small or considerable number of employees, you cannot make any payroll mistakes. You have to be particular when calculating payroll taxes for each employee.
Otherwise, IRAS is going to penalise you. And you may have to pay as much as 10% of the overall payroll.
IRAS frowns on missed deadlines, especially when it is your deadline for filing payroll tax. You have to be prompt in reporting your taxes to the IRAS on or before the due date.
Or, IRAS will ask you to pay penalties in the form of fines. And you may have to pay a fine of 2% – 15% of the dues with interest.
If you are consistently late in meeting payroll deadlines, people will start thinking something fishy is going on.
In reality, you may only be having problems with your payroll processing, yet, who can stop people from talking? It will mainly give the wrong impression to your employees about your professionalism.
Outsourcing your payroll in Singapore to a reliable firm can work for you. Keep your mind open.
Statutory contributions like Central Provident Fund are tricky. The rates applied are based on the age groups.
If you are in a hurry to finish your payroll processing, it can lead to payroll mistakes. There is always a chance of applying the wrong rates and getting your calculations wrong.
Then there are different types of levies that you must deduct and incorporate in your payroll calculations to arrive at the accurate salary of each employee.
IRAS expects you to maintain employee data for certain years.
For ex-employees, you must maintain their records for one year after they leave.
And you must maintain two years of data for all your current employees.
Timely and accurate payroll can keep your employees happy. If you have been suffering from avoidable payroll mistakes lately, outsourcing your payroll in Singapore makes sense. Contact us at [email protected] or call us at +65-6536 0036 to talk to our experts.