While hiring new employees, you have to do a lot of work. The first day is mostly about completing the HR work, signing contractors, and updating files. The focus after completing basic paperwork is on the payroll. In addition to paying your staff, payroll covers hiring and firing, salary, leave dates, benefits, bonuses, and other aspects. As payroll is directly linked to taxes and tax counting, it is covered by the legislation. In case of disobedience of laws, you may be prosecuted. This guide will help you stay compliant with the regulations when hiring a new employee.
Start with the basics.Firstly, add a new employee to your system. Whether you've stand-alone software or incorporated it into main accounting software, you need to cover these basics:
- Confirm that they're an employee of your company and are not an independent consultant or contractor.
- As the employees' personal details affect their tax payment, check their date of birth, address, and marital status.
- Make sure to add correct salary and tax codes. If there are any contractual bonuses and benefits, include them as they must be declared for tax purposes.
- Add the correct working hours for every part-time, full-time, and flexible employee.
- Make sure to add the correct bank details of employees; otherwise, You may end up paying the wrong person. Input the correct payment dates.
Enroll your new employeesIn some countries, enrolling new staff members into a passion or superannuation scheme is necessary. In other countries, it is optional, but most of the employees do it. Your contributions affect age, seniority, and salary. Any mistake can result in serious problems. Ask your employees to inform you if their situation changes and keep all business expenses receipts. Think about the details- important things to consider While enrolling a new employee, don't forget to consider the following things.
- Your staff turnover; are they temporary or permanent.
- Check the local laws governing employee expenses.
- Pay your employees in cash as it is more secure.
- Consider the overtime of your employees.
- Have a complete understanding of local legislation; minimum wage, employee tax reporting, and maternity and paternity leave.
Always talk to your accountantAccountants stay up to date with the accounting laws, including compliance. Hiring new employees without discussing with your accountant can cause problems for you. They'll inform and help you fix any of such problems.
Outsourcing PayrollTo save your time and overheads, you can outsource the work to any payroll company. But it is not a solution to all problems; you may have to check if it is right or not. Remember that outsourcing payroll has pros and cons too. Think carefully before making any decision. Use payroll software that helps you You can simplify your payroll reporting process by using payroll software. Use software that is:
- Easy to use
- Suitable for your location
- Connected to your accounting software
- Cloud-based, so that you can access it anytime from anywhere