By Sarah-Jane Maguire, Business Advice Consultant at Sage
If you have ever tried to calculate your payslip manually then you will realise just how much works goes into it. When it comes to calculating PAYE, PRSI and USC it is difficult enough taking into account standard cut off points, tax credits not to mention the fact that all normal pay is done on a cumulative basis which only adds to the complexity of the calculation. This is why it amazes me as to why people would go to all the effort of doing this when it can all be done with a click of the button.
Many people are under the impression that paying for a payroll package can be a big financial burden and wouldn’t give a return in investment. In fact it is quite the opposite. Many payroll packages are very affordable and are designed to be user friendly so take very little or no training. Some payroll packages also include support therefore if there are any technical issues with the package it can be sorted out in the space of a few minutes.
The advantages of automating your payroll are endless, the time saving will see a return on investment in a matter of weeks, the job that someone spends hours doing can be done in a matter of seconds leaving that employee free to do other important jobs that could otherwise be thrown on the back burner. Not to mention the fact that some people outsource their payroll and pay a big fee when they could easily do it themselves.
You don’t need to be an expert to be able to work your way around a payroll package, it is a simple process of entering employee’s payments and all deductions including Pension, Union, VHI etc and saving the timesheet.
It is very important that you have the correct standard cut off points and tax credits for every employee, from the 1st of January there is USC cut off points, taking into account medical card holders. This will all be supplied by Revenue. PRSI classes will be provided by your local social welfare office. These rates need to be entered into the system on a once off basis and are kept on record unless any changes are made.
Once you keep your payroll up to date you can be confident that you are fully compliant with Irish Legislation, which can change numerous times throughout the year.
National compliance states that you must submit a P45 part 3 when you have a new starter in the company, this must be submitted to Revenue and the employee will be on emergency tax until there is a Tax Credit Cert returned to the employer. If doing this manually via post it could take days, even weeks. However most payroll packages have the facility to do this automatically, it can be uploaded to ROS (Revenue on Line Service) and received immediately. The same process can be applied to P30 and P35 for tax returns.
It is estimated that there are 1.8 million employees in Ireland. The Payment of Wages Act 1991 gives every employee a right to a payslip which shows all payments and deductions. There are 80 million payslips processed each year. With automated payroll it is made easy as payslips can be printed in batch and takes no more than a few minutes. Some packages even include the facility to email payslips which are secure as employees need a code to access them.
Automated payroll packages can generate reports which can help financially maintain a business. These would be very hard to calculate manually and would leave a lot of room for error if working with large figures. Reports like the control summary will provide an overview of the current payroll run for control and auditing purposes. This could be crucial to a business to see how much money is being spent on wages and some packages can create reports which will show just how much is being in spent in different departments of the business.
Now payroll can be made even easier with online packages such as Sage One which is cloud based and can be accessed from anywhere, which means you can pay employees from the comfort of your own home.
What more could you ask for?