The IRS penalizes over 6 million businesses yearly for payroll-related errors and non-compliance, with penalties running into billions of dollars (nearly $7 billion in 2021).
A payroll compliance checklist is a good start to ensure your organization doesn’t fall foul of regulations while employees are paid.
After all, the bottom line is that you ensure that you remain in line with all the local and global regulations governing payroll. When it comes to payroll compliance, there are no grey areas; it is black and white.
However, everything isn’t as simple as it might seem because it includes laws and regulations at the federal, state, and local levels.
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What is payroll compliance?
Payroll compliance not only includes the act of calculating payroll and paying employees but ensuring that all payroll-related government forms are filed, adhering to laws pertaining to payroll compliance at every level, including general laws and regulations surrounding taxes.
Understanding the payroll compliance obligations of your business operations worldwide is critical to staying globally compliant. From federal income tax, the most common tax holding to payroll taxes, it includes various factors in the payroll process.
Why is payroll compliance so important?
While the process includes many administrative tasks, its importance has been magnified in the information age.
Aside from the obvious benefit of avoiding legal and financial penalties and saving your organization millions of dollars in the process, payroll compliance also has the benefit of building a positive reputation and improving employee morale.
According to a new survey from The Workforce Institute at Kronos Incorporated, about half of the American workforce (49 percent) will begin searching for a new job after experiencing just two payroll mistakes.
To promote organizational growth and maintain profitability, it is imperative to prioritize employee satisfaction, as they are a crucial component of any company's success.
Compliance with payroll regulations and timely payment to employees is perceived as a hallmark of trustworthiness and responsibility by stakeholders, customers, and employees alike. This can significantly elevate the company's reputation and facilitate attracting and retaining high-quality talent.
Employee experience is critical to ensuring organizations can deliver on core business objectives. And the easiest way to ease your concerns and focus on your business needs is to use a payroll software or a third-party provider to handle your compliance concerns.
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What should you be looking for?
With the rise of remote work and hybrid work becoming the norm rather than the exception, it is important to look for a global payroll provider providing a digital radar for payroll compliance.
Arguably the most important aspect is to ensure that a comprehensive compliance health diagnosis is made in real time.
A global dashboard of organization-wide adherence to compliance, along with a compliance calendar that also includes compliance checklists and automated alerts, is critical to ensuring that you remain proactive rather than reactive when it comes to payroll accuracy.
If you’re looking for a global payroll provider who can ensure that your employees are paid while ensuring you remain compliant, look no further than Neeyamo.
Our compliance module includes a rich and interactive global compliance command center that gives you complete visibility and the ability to monitor progress across multiple locations.
With integrated workflows and proactive early warning signals, you can stay a step ahead and implement measures against potential issues.
Neeyamo Compliance is equipped with a comprehensive global compliance library that is constantly updated with the growing list of laws that govern the payment of employees globally.
Aside from being a repository of all guidelines, employment agreements, and much more, it also includes a virtual compliance vault that tracks every update that is made. This ensures that audits are made simpler while also providing intelligent access to relevant historical data & records.
If you want to know more about how Neeyamo can help you solve your payroll compliance concerns, reach out to us at irene.jones@neeyamo.com.
