Managing payroll services is one of the HR department's core functions. Compensation is a key factor when it comes to keeping employees satisfied and maintaining productivity so HR representatives must ensure that this task is handled well at all times.
The slightest mistake can lead to long-term headaches when wages are involved. HR departments need to establish reliable payroll systems to eliminate potential problems. The following is a look at how to create a reliable compensation service.
Employment ID
According to the Small Business Administration, the first step is to acquire an employment identification number from the Internal Revenue Service. This code is also known as the Employer Tax ID or Form SS-4.
The EID is important for filing and reporting taxes. Further, the number has to be included when a company submits employee information to both state and federal government agencies. Without the EID, it's nearly impossible to complete all necessary documentation.
Fortunately, obtaining the number is somewhat simple. The SBA points out that businesses can apply for one online or reach out to the IRS.
The proper means
The Houston Chronicle explains that there are three potential solutions when it comes to managing payroll: manual, in-house and outsourcing. The first option is likely the most difficult as it requires businesses to calculate wages and taxes by hand. Further, the second choice forces an employer to develop a system without any support.
That's why working with an HR outsourcing company like Triton HR is the ideal way to handle employee compensation. Triton HR offers cutting-edge payroll processing software to ensure that organizations can easily manage wages, monitor taxes and eliminate any small errors before they become long-term issues.
Determine the optimal pay period
The SBA also notes that you have to determine a pay period for your staff. There isn't a universal timetable, but some are more popular than others. Bi-weekly may be the most common solution as it prevents companies from having to cut new checks every week.
Monthly compensation can also be an effective strategy from an employer perspective, but staff members likely won't appreciate the approach. A month may be too long to wait for a paycheck in many instances so workers will feel financially burdened under this system.
Weekly might be the worst option for both businesses and their employees. Enterprises might not have the means to distribute wages every week and workers will probably think their balances are too low.
