Payroll administration refers to the activities of payroll administrators to help employers better manage the payroll services for the company. The payroll administration process include keeping track and organizing company’s employees payroll matters such as their total number of working hours, pay rates, bonuses or commissions that have been earned by employees. Payroll administrators often have to work with strict payment deadlines and comply with the Employment Act in Singapore. Following the salary and hour standards, the experienced administrators will need to ensure employees can get paid on time with right amount of money. Otherwise, the performance of the employees are likely to be affected that can result in low productivity for the business as inaccurate paychecks can cause them great inconvenience especially for foreign workers who need to provide for themselves financially in terms of the living expenses, rental fees and remittance of their wages to their families on a regular basis. Therefore, the roles of payroll administrators are very important as negligence due to carelessness or lack in knowledge not only can affect the productivity of employees but also implicate legal issues and disrupting business operations.
Changes To Employment Act For Payroll matters
For instance, employers and payroll administrators need to understand and be mindful of any changes to Employment Act such as the new requirement from government to issue more detailed reports that includes itemised pay slips and key employment terms to their employees. This new directive which takes effect from 1 April 2016 is to let employees to have a better understanding of how their salary is calculated, their employment rights, terms and benefits. This can also help employers prevent and minimize any misunderstandings or disputes with their staff at the workplace.
Examples Of Itemised Items
1. Full name of employer
2. Full name of employee
3. Date of payment
4. Basic Salary (Rate of pay)
5. Start and end date of salary period
6. Allowances paid for salary period eg fixed allowances such as transport or ad-hoc allowances
7. Any other additional payment for each salary period eg Bonus, rest day pay, public, holiday pay
8. Deductions made for each salary period: All fixed deductions (employer’s CPF contribution), all ad-hoc deductions (no-pay leave, absence from work)
9. Overtime hours worked
10. Overtime pay
11. Start and end date of overtime payment period
12. Net salary paid in total
Note: Please refer to Singapore Employment Act for detailed information. Failure to issue itemised pay slips, maintain detailed employment records or providing inaccurate information to the Commissioner for Labour can lead to serious civil breaches and administrative penalties.
Therefore, as payroll is an important and essential part of business operations, many businesses are recognizing the benefits and values of outsourcing payroll to an external payroll processing agency to avoid inaccuracies that can lead to serious consequences other than payroll errors. With access to effective payroll administration knowledge and advanced technology, payroll specialists from external payroll processing firms can help business owners save more money and better productivity by ensuring all tasks are completed on time with high accuracy.
Payroll Administrative Services For SME
It is understandable and common for new startups especially SME or small businesses, that the business owners would usually be the one handling all the payroll administrative work due to not having many employees initially. However, business owners will realise the importance of payroll administration when they start to hire more and more workers as the business grows. SME owners can wait until this blooming time to start having their human resource department look deeper into their payroll administration and management matters on setting up a proper payroll management system if cost is a concern initially. But having a outsourced payroll services will be more effective, efficient to business operation in the long run as besides the needs to maintain accuracy in pay and leave administration, other challenges include preparation of payroll taxes in facilitating Singapore employees report their personal income tax which can become overwhelming and lead to unforeseen miscalculation.
Payroll Administrator Roles & Responsibilities
In general, the roles and responsibilities of payroll administrators include the following activities:
- verifying the total number of hours that employees have worked
- verifying any additional allowances or bonus for current salary period such as overtime or pay increases
- calculating and issuing salary according to company’s practice which is usually by cheque, cash or electronic transfer
- processing all fixed or ad-hoc deductions for each salary period such as no-pay leave, employee’s cpf contribution
- processing all holiday, sick and maternity claims and expenses
- handling any queries regards to payslips
- generating reports and tax submission
- providing payroll support to new staff
- processing necessary paperwork for leaving staff
- other general administrative work
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