The Ultimate Guide for Payroll Compliance
Updated: Nov 29
Say goodbye to the anxieties of payroll compliance with Invatechs’ ultimate guide
Your company survives and thrives on the success of its payroll. More than making sure your staff are paid on time, it also ensures you remain compliant. Fail to adhere to federal, state and local regulations and you could face some stiff penalties. Nevertheless, we understand that navigating payroll can be complicated.
That’s why in this article, we’re going to cover what you need to know about payroll compliance. It will cover common payroll mistakes and complaints as well as the top features your payroll needs. By the end, you’ll know the steps you need to take to guarantee you’re compliant. This article is perfect for businesses and payroll professionals alike.
We’ll then wrap up by introducing you to Invatechs’ own bespoke, custom payroll solution designed for your business. Are you ready to finally make your payroll the very best it can be? Invatechs is ready to give you the solutions you’ve been looking for.
The Cost of Non-Compliance
Payroll is one of your business’s most important tools and overheads. It’s a fundamental piece of HR software you’ll need to understand your revenues and expenditures. That’s why if you’re not using it correctly, you could face some very detrimental challenges for your business.
Back payments or missing payments. Losing irreplaceable data and the trust of your employees. Entering incorrect tax or wages information that leaves you liable for fines. These mistakes can have serious consequences for the efficacy of your business.
Of course, basic compliance requires you to calculate wages and overtime correctly. However, specific state, local and federal legislation could trip you up if you’re not careful. More than that, they’re always changing. That’s why if you’re not using an automated payroll suite that updates your system with the latest legislations, you’re just giving yourself double the work.
Payroll compliance you have to adhere to includes:
Beyond federal taxes, you then have to adhere to your state’s tax requirements. This gets more complicated when you expand your business across states and then internationally.
You really can’t afford to make mistakes from human error. However, this is what can happen when you use payroll software that isn’t scalable. Entering even just a small piece of incorrect information can cost you and your employees in the immediate and distant future. Fortunately, automation has played a huge role in minimising mistakes and improving data security.
Let’s take a look at some of the common mistakes. Identifying them can bring you closer to eradicating them for good.
Top Payroll Mistakes
Too many delays:
If you’re not on top of your time sheets, work records and reports, you’re more likely to keep delaying your payroll. The Payments Wage Act, 1936 warrants that your business provides your staff timely renumeration.
So, on-time accurate payments are priority number one for your payroll.
Non-Compliance of EPF and ESI Filing:
If you don’t file and report EPF and ESI contributions to employees’ salaries, you could be subject to penalties. This is easily remedied. Automated payroll can ensure you submit for and meet the deadlines every time.
Inaccurate tax calculations:
Professional Taxes (PT) and Tax Deducted at Source (TDS) are two crucial statutory payroll compliances. Failing to file and report these correctly and on-time can have legal and financial implications that damage your business’s credibility.
Poor data documentation & storage:
These mistakes are made all too often. Manual data entry can mean you get working hours, overtime and employee information incorrect. That means you calculate wages and taxes incorrectly too. You’re not legally compliant nor do you have the most up to date details on your employees. If you don’t have comprehensive data documentation in place, you can jeopardise the efficacy of your entire payroll system.
Benefits & perks:
Your business might offer employees a number of perks. These could include health insurance, vacation, transportation support and stock options. It’s easy to let these benefits slip through the payroll net. However, it’s important you integrate them into your payroll system, rather than accounting for them separately.
We have a whole blog dedicated to the most common payroll mistakes on our InvaBlog. Check it out to go into more detail about how these mistakes can cost your business.
How You Can Abolish Payroll Compliance Mistakes with the Top Payroll Features
By now, you can see why the stakes are high for getting your payroll right. From design to implementation, it needs to work like a well-oiled machine. These are common mistakes made in companies big and small. Your payroll might require changes minor or more fundamental.
However, once you have these fundamentals, you can amend those common mistakes and fully adhere to compliance once and for all.
We’ve written extensively about the benefits of automated payroll on our InvaBlog. It’s a great resource for learning everything you need to know. Make sure you take a look. Nonetheless, the benefits of automation are clear and simple. Automation takes difficult, detailed and time-consuming work out of your hands. With an automated system, the software can update itself, so you don’t have to worry about manually adhering to legal tax requirements. It can track, calculate and monitor wages and expenditure. It can provide and store automated reports. Most importantly, it means your employees are always paid on time.
Say goodbye to storing spreadsheets and files in dusty cabinets. When you install an automated payroll suite, you can protect sensitive and confidential information behind increased cybersecurity and authorisation. An important step to take is identifying who across your business has access to what. Once you’ve decided, you can organise your payroll in a way that gives selected employees direct, protected access to relevant information.
No more human error. As long as data and information are input correctly, your payroll system will take care of calculations and deductions for you. It will also track benefits, vacation and time-attendance.
As we’ve explained, payroll shouldn’t just cover employees’ wages. It can become your most effective tool for time and attendance tracking. With a clock-in-and-out system, employees won’t have to retrospectively enter working hours.
Furthermore, your payroll allows you to gather data and information on how you’re paying your staff.
When you need to make decisions on company structure and pay in the future, this data will be crucial. With an automated system, the reports and data you need will be ready for you when you need it.
With a cloud-based payroll suite, everything everyone will need can be found in one portal. That means staff can retrieve their payslips. Monitor if wages and time attendance has been entered correctly. Retrieve and access their W-2. See how much they’ve paid in tax. Apply for vacation, benefits and much more.
Accessibility means transparency. Transparency ensures everyone across your business has the most up to date information they need.
We go into even more detail in our Top 10 Payroll Software Features blog!
Payroll, the Invatechs Way
As payroll experts, Invatechs has been creating bespoke payroll solutions for SMEs and large institutions across a number of industries. As a result, we know a thing or two about payroll, and what it takes to make the perfect payroll system.
With our tailored services, we build and deploy software that integrates with your business’s ecosystem. This means implementing payroll that can process complex organizational and staffing structures. We ensure your payroll system is built with thorough awareness and research into your local and state tax regulations.
With our customisable features, you can grow, adapt and change your solution as your business develops too. More than that, after your payroll is live, we provide post-launch maintenance and servicing. So, even if you find compliance complaints and mistakes are still being made, we can iron them out.
Because our services are bespoke, we’re in the perfect position to collaborate with you and build the exact solution you need. So, whether you’re:
A UK based Umbrella company that needs payroll designed for contractors and sub-contractors
A business looking to sell payroll solutions in need of a team of engineers and designers
An accounting agency that’s long over-due a payroll update
An Enterprise Solution that needs bespoke payroll
We can help.
Our best work speaks for itself. Take a look at one of our case studies, where we built a cloud-based payroll solution for UK government vendors . It required us to build a payroll suite that could integrate with existing accounting software such as Xero. As a result, we created an optimised solution for over 5000 staff members and partners.
In Conclusion – How Invatechs Can Make Your Payroll 100% Compliant
In this article, we’ve covered the main mistakes and complaints when it comes to payroll compliance. They’re easily made, but now, more than ever, they’re also easily fixed. With a custom-made and automated payroll solution, you can boost your business’s compliance to the highest standards.
When we partner with you to build a payroll solution, we make the process as streamlined and efficient as possible.
We start with thorough research and analysis into your business, payroll and HR processes.
We’ll work with you to decide on a tech stack and assist you with any software licensing required.
Once we’ve decided on the structure and features of your payroll, we’ll begin building.
We ensure your solution is tested with Quality Assurance and working at its most optimal.
Once your solution is ready, we’ll assist you with its rollout. This includes demonstrations, handbooks and training.
After your solution is fully implemented, we’ll be on standby to provide maintenance, support and updates.
From the get-go, we’ll understand your pain points and create a solution that solves them. We’re not just experts in payroll either. Our Fintech capabilities stretch across DeFi, mobile apps development and NFTs. Our comprehensive Fintech knowledge means your payroll solution is built and ready for the demands of changing technologies. Had enough of monthly payroll mistakes? Make them a thing of the past by contacting Invatechs today.