As the saying goes, you don't build a business, you build people and the people build a business.Your employees are one of your greatest assets but you will agree with me that managing your employees can be one of your greatest challenge especially when it comes to managing payroll.
If you are new to the terminology, you might be asking, “So what is payroll accounting?”
Payroll accounting is the specific accounting discipline concerned with the calculation and disbursement of compensation for employees covering salaries, overtime, bonuses and allowances that have been earned by its employees and withholding the appropriate statutory deductions such as PAYE taxes and Social Security deductions.
One of the ways by which small-to-medium enterprises in Ghana manage their payroll is by doing it manually. It is often referred to as “table top payroll.” The staff signs and their money is given to them by cash, no deductions and no filings. Other businesses in Ghana also makes use of excel sheets and since payroll is dynamic it becomes more and more difficult to keep up as your business grows also there is a high risk of human error.
These forms of payroll management can lead a business into trouble, you can't keep outwitting the long arm of the law. But you know what? It is amazing the number of companies in Ghana still hooked up to this way despite the enormous exposure!
How to Process Payroll
It’s important to understand a few of the components of payroll. It includes a lot more than simply paying your employees.
Here is a quick overview of the steps required to process payroll and other contributions:
Calculating the earnings: Do you pay your employees every week, fortnightly or every month? This part of the job requires you to add up employees’ hours and value it at the contract rate and where there is overtime at the overtime rate.
Calculating the statutory deduction: When working on payroll, you need to calculate withholdings from pay based on the legislative instruments enforce during that pay period along with Social Security and Medicare contributions.
Paying the employees: You can pay cash, cheques or electronic transfer
Pay Taxes, Insurance and Benefits: Once all of the amounts are calculated and withheld, a business must submit the payments to several different entities. Taxes, benefit contributions and insurance premium payments.
You will agree with me this process can be cumbersome.
Investing in a Payroll Software
Payroll management software makes the process of calculating payroll for employees and withholding of taxes a cakewalk. You can get all the above processes completed with a click of a button.
see how it works!
Aruti Payroll can take payroll off your to-do list. Invest in a robust and cost effective system.
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