Payroll Productivity Checklist: How To Overcome Key Blockers to Efficient Payroll

Every business and its payroll department always strive for efficiency. Some manage payroll in-house using payroll software, while others outsource to a managed payroll provider. It’s a case of what works best for you and your business needs.

Whether run in-house or outsourced, there are ways to maximise your payroll productivity, which is why we’ve put together this comprehensive Payroll Productivity Checklist. But before we dive into it, let's start by understanding what payroll is.

 

 

In short, the term ‘payroll’ refers to the process of paying employees and related tasks. It includes:

• Calculating and paying wages and other compensation.
• Verifying employee information.
• Recording time and attendance.
• Calculating gross pay.
• Deducting taxes and other withholdings.
• Maintaining compliance with tax laws and regulations.

Further to the above are the roles involved in payroll. In SD Worx, formerly Intelligo’s ‘2022 Irish Payroll Report’, respondents were asked to choose the job title which best describes their role. The titles chosen were:

 

IPASS Ireland’s leading provider of payroll and VAT training and certification, was also the most popular payroll training provider. 65% of respondents stated that they possess a qualification from IPASS.

 

 

So, how do you measure payroll efficiency and streamline your payroll process? One way to do it is to have a payroll productivity checklist in place. This checklist will help you keep track of all the essential steps and deadlines involved in processing payroll. 

While each business may have its unique requirements, here is a general payroll processing checklist that you can customise according to your needs:

1. Verify employee information

Before processing payroll, verify employee information. This includes ensuring that you have accurate and up-to-date details such as legal names, addresses, and contact information. Verifying employee information helps you comply with employment laws in Ireland and ensures that everyone is paid accurately.

Classifying employees correctly is also essential, as misclassifying employees[RV1] [EB2] [RV3]  as contractors, for example, can lead to fines of up to €250,000. 

2. Record time and attendance

Employee time and attendance tracking is crucial for payroll processing. This includes tracking regular hours worked, overtime hours, and any paid time off taken by employees. By maintaining detailed records, you can calculate wages correctly and avoid any discrepancies.

3. Calculate gross pay

Gross pay refers to the total amount of wages an employee earns before any deductions are made. Additionally, you should factor in any overtime hours and any additional compensation, such as bonuses or commissions.

4. Deduct taxes and contributions

After calculating gross pay, you need to deduct various taxes and contributions from the employee's earnings. This includes taxes such as Universal Social Charge (USC) and Pay Related Social Insurance (PRSI). You also need to deduct employee benefits and other withholdings such as health insurance premiums and retirement plan contributions.

5. Issue payments

Once you have calculated net pay (gross pay minus deductions), it's time to issue employee payments. To ensure payment schedules are consistently met, the use of trusted payroll software should be explored.

6. Maintain records for compliance

To ensure compliance with tax laws and regulations, it’s crucial to maintain records of your payroll for a specified period. Proper record-keeping helps you accurately track employee information, hours worked, pay rates, and all taxes and withholdings.

To do this effectively, complete a payroll compliance checklist. For more on adhering to payroll rules and regulations, read our article Payroll Compliance: How to Meet Payroll Rules and Regulations.

 

 

In our recently published Payroll Proficiency Report, we looked at the following six key drivers of payroll proficiency in Ireland:

• Legislation
• Technology
• Reward
• Capability
• Workforce
• Partner

Our research uncovered the rising use of payroll software, particularly On-Cloud payroll software. On-Cloud payroll software, such as MegaPay On-Cloud, delivers a broad range of benefits that streamline a business’s payroll processes.

For instance, 68.6% of businesses we surveyed said that payroll technology such as On-Cloud software is making data collection easier. Not only that, but 64.7% of businesses stated that available technologies and systems make payroll processing easier, while 63.9% also said it helped with the overall preparation, management, and distribution of payroll. 

Payroll software also helps businesses overcome challenges such as taxation and legislation. Payroll compliance issues businesses we surveyed faced included:

• Taxation (63%) 
• The social security system (53.6%) 
• Obligations imposed by the government (44.9%)

The last point here, ‘obligations imposed by the government’, relates to legislation, an area that affects all employers. While the laws governing payroll are mandatory, the reasons why a business finds something like taxation difficult to navigate can depend on their structure. Regardless, On-Cloud software is seen as a solution as it takes care of everything for the employer, from collating monthly reports to end-of-year tax updates.

 

 

So, what are some common payroll productivity pain points? SD Worx, formerly Intelligo, works with some of the world’s most recognisable brands and over time we’ve encountered – and resolved – all kinds of client payroll issues. For example, let’s say there’s a business that has one person running their payroll. 

Unfortunately, due to personal circumstances, this person is no longer able to perform their duties. This leaves the business in a vulnerable position and unable to run payroll and pay their employees efficiently and on time. To mitigate this risk, many businesses decide to outsource their payroll to us. By doing so, our talented and experienced pool of experts take over the client’s payroll processes. 

Auditing and checking should play an important part of any payroll processing, so during the onboarding of this client, we’ll conduct sufficient balances and checks through parallel runs and UAT. We do this for every payroll we run, whether it’s for one or one thousand employees.   

When onboarding a client, we often find that the payroll they’re currently processing doesn’t facilitate the production of a Nominal Journal. Or it may be the case that a Journal report is produced that doesn’t meet the needs of the finance department. The finance department may spend additional time manipulating data to get the Nominal Journal they require. At SD Worx, formerly Intelligo, we work with the client to produce a Nominal Journal in the required format for their accounting software, leaving time for the finance department to deal with finance. 

Lastly, clients often ask us to process sensitive payroll for Directors. Doing so allows for the utmost security of sensitive data.

While payroll teams can work on improving their processes, outsourcing to a Trusted Payroll Partner is a guaranteed way to eliminate payroll issues.

 

 

• Payroll team readiness: Payroll teams tend to underestimate the amount of work involved in an implementation. For instance, it’s important to know that payroll teams will have to manage their day-to-day operation with their previous provider in tandem with MegaPay’s implementation.
• Manual input: Payroll processes are improved by removing manual input through importers and automation.
• Data preparedness: Payroll teams and businesses more broadly often underestimate the amount of work involved in the data gathering phase.
• Financial team readiness: Finance teams can be slow in sign off on reports/nominal output as the requirements of the nominal output may not be known to the finance team. Requests for late changes to nominal structures can cause delays.
• IT team preparedness: IT teams requesting additional security questionnaires to be reviewed/filled late in the project is a common issue we see. Furthermore, a lack of knowledge in relation to environments/SQL server can also cause delays.
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By partnering with SD Worx, formerly Intelligo, you get all the benefits of MegaPay Outsourced. For instance, you mitigate the risk of a single point of exposure by handing your payroll process over to a team of experts. This indicates that our payroll process is expertly managed and overseen by specialists at every step, ensuring precision and expertise in handling your payroll needs, despite the support of technological tools. We also document everything and are GDPR compliant plus we have a robust Information Security Management System (ISMS) adding a further layer of protection.

If that wasn’t enough, we’re the team behind Ireland’s leading payroll software, MegaPay, and we are members of the Payroll Software Developers Association (PSDA). You can rest assured that our outsourced payroll software solution, MegaPay Outsourced, is reliable. 

Furthermore, outsourcing removes unexpected costs like recruitment, training, and covering the payroll function during holidays. There aren’t even any hardware, software, licensing or maintenance fees. 

To enhance your payroll productivity, book a demo of MegaPay Outsourced today.