Proper payrolls lead to big savings
Proper payrolls lead to big savings
Anne Reilly, Managing Director, Paycheck Plus.
While payroll spend is one of the biggest costs for most businesses, the function is often designated to a junior member of staff with little formal payroll qualification or experience.
According to Anne Reilly, managing director of Drogheda-based Paycheck Plus: “While payroll software provides a useful tool for calculating and creating the necessary documentation, it is only as good as the information inputted,” Reilly said. “Many payroll operators rely on software to calculate the correct PAYE, PRSI and USC correctly, when very often manual intervention is required to ensure that employees are paying the correct rates for their individual circumstances.
“The Paycheck Plus team regularly uncover discrepancies in calculations that can generate real savings for client employees and for employers, as these inaccuracies generally affect employer’s PRSI as well as employee taxes.
“A recent meeting with a prospective client highlighted that the consultant, engaged to complete the year-end process and set up the system for the year ahead, had ticked the wrong boxes for the application of PAYE, PRSI and USC in one payment and two deduction fields. And, like many others, the consultant relied on the system to apply the correct PRSI class.
“By failing to intervene manually to reflect the personal circumstances of certain employees, a number of employees had 4 per cent of their pay deducted unnecessarily, while the employer overpaid by more than 10 per cent of the salary cost. The payroll expertise of Paycheck Plus professionals resulted in refunds exceeding €35,000, a significant saving by any standard.”
Paycheck Plus works with its clients to ensure they structure their payroll to maximise cost efficiency for both employer and employee. “Our IPASS-qualified team monitor the various payroll elements and advise on the most effective treatment of various payments and deductions while ensuring transparency and compliancy to meet Revenue, social welfare and employment rights audits,” Reilly said.
With payroll taxes being the primary source of income for the exchequer, Revenue pays close attention to the detail within any payroll process.
“Ignorance of the changing requirements is no excuse, so it pays to consider the best option for your business, because one fine or penalty could prove more costly than outsourcing your entire payroll operation,” said Reilly.
By outsourcing payroll, other cost efficiencies are also generated. “Processing payroll in-house brings no real value to the overall profitability of the business,” Reilly said. “Instead, it absorbs valuable time and resources that could be better utilised for profit-making activities.
“The cost of processing payroll in-house can be surprising. For example, the real cost of employing a person is up to three times their salary when you take into consideration factors such as PRSI, holiday pay, pension costs, office resources, recruitment, induction, ongoing training, employer insurance, utility costs and social events.
“There’s the cost of the software, support and updates, stationery, printing, data storage, back-up, IT support and maintenance. When you outsource your payroll function, you no longer have to worry about keeping up to date with ever-changing calculations, employer obligations and employee entitlements, and what you have is a transparent cost structure with no hidden surprises.”
Sunday Business Post 9th June 2013