Among the many business administration processes, one of the most vital ones is the payment of employees.
Believe it or not, preparing payroll is not as simple as it seems.
This is a crucial task in business administration.
The payroll administrators and coordinators are tasked with creating payroll for all employees.
However, these days it’s tough to find a dedicated payroll administrator in a company, because these tasks are sometimes conducted by the business owner themselves or a finance administrator on most small- and medium-sized enterprises, with others mostly choosing to hire external payroll administrators instead.
This begs the question, what is payroll administration, and what does it entail?
Well for starters…
Payroll administration can be defined as the duties of organizing employees’ compensations for the hours worked and extra tasks such as commissions. The rewards can include the total hours worked by each employee, the rate of pay, and any other additional payment required.
Big companies with many employees or different payment rates and options usually have dedicated payroll administrators to provide all-encompassing employee payroll administration services.
On the flip side, most small businesses typically have the business owner carrying out payroll administration duties since it only involves a few employees.
For fewer employees, it is usually easier for the employer to facilitate, organize and keep track of wage payments.
What does payroll administration involve?
Payroll administration encompasses all the tasks involved in paying an organization’s employees.
It typically involves keeping track of hours worked and ensuring that employees receive the appropriate amount of pay.
More so, it also includes calculating taxes as well as ensuring that they are properly withheld and processed.
Depending on the company in question, a full range of other deductions may be calculated, withheld, and processed as part of this process.
Additionally, the processing of contractor payments may fall under the same umbrella.
The specific tasks involved in payroll administration tend to vary according to the needs of each unique company or organization.
For example, some companies have workers that receive commissions in addition to salaries.
In these companies, including commissions in employee salaries is a part of payroll administration.
For some companies, it also involves assigning exempt or non-exempt status to workers, adding bonuses into paychecks, calculating overtime payments, and adhering to applicable employment laws.
Now, here are some of the specific duties of a payroll administrator:
- Preparing and processing monthly or weekly payroll for employees
- Keeping payroll records for each employee with up-to-date and accurate information
- Reviewing any approved expenses or overtime pay that an employee may be entitled to
- Updating employee records with any changes that might include maternity pay, sick pay or new work patterns that might affect their pay
- Communicating any payroll updates or changes to managers or colleagues
- Entering information into the payroll system about employee taxes, exemptions, transfers, firings and resignations as details change
- Answering staff queries about their pay slips and resolving any issues where possible
- Creating detailed financial reports complete with statistical graphs, tables and charts
- Calculating tax and national insurance and process salaries accordingly
- Issuing employees with their P9, tax forms and any other necessary documents
While administrating a payroll, another aspect to note is ensuring that taxes and other statutory deductions have been adequately computed and deducted by the country’s requirement.
This process is sometimes overwhelming, with some small and medium enterprise owners hiring payroll specialists with experience managing payroll matters.
Some of the payroll software available these days can be set to incorporate these deductions, ensuring a seamless process for the employers.
Errors in these statutory deductions can pose serious complications for the business, especially while compiling and filing returns with authority.
What are the qualities that make for a good payroll administrator?
In order to perform these duties, there are certain skills and qualifications that a good payroll administrator must possess.
Good payroll administrators should have an in-depth payroll knowledge of their job as well as personal qualities required for the role including being trustworthy, honest, communicative, helpful, responsive, approachable and confidential.
Other positive traits that would be a massive help in performing this role well include:
- Excellent verbal and written communication skills
- In-depth understanding of human resources and labor rules and regulations
- Attention to detail and strong numeracy skills
- Working knowledge of payroll software
- Strong organizational and time management skills
- Ability to prioritize tasks effectively
- Interpersonal skills
You might also want to have a read of our blog entry on how to become a payroll administrator if you feel that this is a career path tailored for you.
In conclusion, payroll administration requires payment processing and includes all deductions and payments.
Using specialists and software that assist in correctly implementing the statutory deductions such as pay as you earn and insurances can help prevent problems associated with direct deposit, tax exemptions, and tax deductions.
It is essential to ensure you get a professional payroll administrator with experience and the right skills in payroll and tax administration.
At Flexi personnel, we offer company payroll and tax administration services regardless of company size.
We offer such services without interfering with your organization’s human resource management.
Our services are meant to take care of all the payroll administration processes and payroll tax remittances for the organization, with our expertise also not just limited to local management because we also assist in expatriate payroll management too.
Ultimately, Flexi Personnel is a 12 years’ experience payroll services provider with expertise in supporting both local and expatriate payroll management in Kenya and other countries, all whilst ensuring compliance with the necessary payroll tax legislation in every country of service delivery.
Our payroll and tax administration spectrum includes:
- Net payments;
- Tax administration;
- Employee benefits; and
- Annual tax filing
We are constantly adapting to the changing and competitive markets in Kenya and Africa as a whole, so get in touch with us today for further information.