This article discusses the importance of payroll administration in a business and provides information on both HR and finance perspectives.
Is Payroll Part of HR? For the company to run smoothly, several vital functions must be carried out. Two of these are human resources and finance. Unfortunately, there is often confusion about who should be responsible for payroll. So let’s explore the HR and finance departments’ roles in payroll Accounting.
The role of the HR department in payroll services is crucial in ensuring that employees are paid accurately and on time. The responsibility of an HR department includes maintaining employee records, managing employee benefits and compensation, conducting employee onboarding and orientation, managing employee performance, addressing employee relations issues, overseeing compliance with employment laws and regulations, and developing and implementing employee policies.
The HR department should be the primary point of contact for payroll services within an organisation. The human resources department does many jobs, one of which is payroll. The HR department is typically responsible for ensuring that all employees are paid on time and correctly. They also typically handle any payroll issues, such as discrepancies or errors.
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The Role of the HR Department in Payroll Services
The HR department is usually responsible for the following:
- Maintains employee record
- Manages employee benefits and compensation
- Conducts employee onboarding and orientation
- manages employee performance
- Addresses employee relations issues
- Oversees compliance with employment laws and regulations
- Develops and implements employee policies.
Let’s take a look at them in detail.
- Maintains employee records: The HR department is responsible for maintaining employee records. This includes keeping track of employee information such as contact information, emergency contacts, employment history, and educational background
- Manages employee benefits and compensation: The HR department manages employee benefits and compensation. This includes overseeing the administration of health insurance, retirement plans, and other employee benefits. The HR department also negotiates salaries and wages with employers
- Conducts employee onboarding and orientation: The HR department is responsible for employee onboarding and orientation. This consist of making new employees familiar with information about the company, its policies, and its procedures. The HR department also trains new employees on the job
- Manages employee performance: The HR department is responsible for managing employee performance. This includes setting performance goals, tracking progress, and providing feedback. The HR department also conducts performance reviews and makes recommendations for improvement
- Addresses employee relations issues: The HR department is responsible for addressing employee relations issues. This includes investigating complaints, mediating disputes, and counselling employees. The HR department also develops policies to prevent and resolve conflict
- Oversees employment laws and regulations: The HR department oversees employment laws and regulations compliance. This includes ensuring that the company complies with federal, state, and local laws. The HR department also monitors changes in the law and updates policies as needed
- Develops and implements employee policies: The HR department is responsible for developing and implementing employee policies. This includes creating policies on attendance, dress code, and work hours. The HR department also enforces policies and provides employees with information about the consequences of violating them.
The Role of the Finance Department in Payroll Services
The responsibilities of the finance department are stated below:
- Sets up payroll account and manages payroll processing
- Manages garnishments and child support deductions
- Prepares and distributes payroll reports
- Manages employee direct deposit accounts
- Prepares and files payroll tax returns
- Reconciles payroll account
- Processes year-end payroll tax forms.
Let us elaborate on these for you.
- Sets up payroll account and manages payroll processing: The finance department is responsible for setting up and managing payroll processing. This includes ensuring that all employee information is accurate and up to date and that payroll is processed promptly and efficiently
- Promises compliance with state, federal, and local taxes: The finance department is responsible for ensuring compliance with federal, state, and local taxes. This includes withholding taxes from employee paychecks and remitting the correct taxes to the appropriate agencies
- Manages garnishments and child support deductions: The finance department manages garnishments and child support beliefs. This includes ensuring that the correct amounts are deducted from employee paychecks and remitting the proper payment to the appropriate agencies
- Prepares and distributes payroll reports: The finance department is responsible for preparing and distributing payroll reports. This includes creating reports that show employee hours worked, wages earned, and taxes withheld
- Manages employee direct deposit accounts: The finance department is responsible for managing employee direct deposit accounts. This includes ensuring that employees’ paychecks are deposited into their performance promptly and efficiently
- Prepares and files payroll tax returns: The finance department is responsible for preparing and filing payroll tax returns. This includes ensuring that the correct amount of taxes is remitted to the appropriate agencies
- Reconciles payroll account: The finance department is responsible for moderating the payroll account. This includes ensuring all employee information is accurate and up to date and that all payroll transactions are accounted for
- Processes year-end payroll tax forms: The finance department is responsible for processing year-end payroll tax forms. This includes ensuring that the correct amount of taxes are withheld from employee paychecks and remitting taxes to the appropriate agencies.
The finance department also performs the functioning of payroll. The finance department manages the company’s finances and ensures that all financial transactions are processed correctly. Their job also includes preparing and filing the company’s payroll tax returns.
Conclusion
The HR and finance departments have a role in payroll. However, the finance department is typically better suited for this task because it has more expertise in managing finances and processing transactions. In addition, the finance department is typically generally equipped to handle issues that arise with payroll.
If your company is searching for a partner to outsource its payroll processing, we recommend working with a provider that has experience in both human resources and finance. This way, you can be sure that your payroll will be managed correctly and efficiently. Vikalsearch can help you in this regard. Get in touch with us to know more.
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