Payroll

How To Achieve Secure Payroll Processing

secure payroll processing

Oct 19th, 2017 by TRAXPayroll

Payroll is without a doubt one of the most confidential things that small and large businesses are responsible for managing. Should this data fall into the wrong hands, the consequences can be both far reaching and detrimental. Therefore, knowing how to secure payroll processing is essential, and below are some tips which will show you how to do it.

How Can Payroll Be Compromised?

Payroll data entails information involving your employees, such as their Social Security Number, birth dates, home address and bank account numbers. Clearly, if this information is acquired by identity thieves or other criminals it leaves both you and your employees vulnerable to payroll fraud and identity theft. There are two ways in which payroll is compromised, and this is either internally or externally.

Your employees are arguably the greatest potential threat, since they have direct access to the information, particularly if they work in the HR department. Even employees who do not have access to payroll may still attempt to steal it from their co-workers. Even if you believe your employees can be trusted, research shows that small businesses are much more susceptible to payroll fraud than larger institutions. External threats involve criminals and groups that attempt to acquire information through phishing, malware or computer hacking.

How To Protect Your Payroll

Payroll should be processed in a secured room that only authorized employees have access to. The room should be locked and also have security cameras present which show who enters the room and when. By restricting payroll to only a handful of employees, if the data becomes compromised you can quickly narrow down the most likely culprits.

The computers which are used for payroll processing should be equipped with the latest firewalls, and should be regularly updated. Any passwords which are used to secure the computers should be robust, and should be changed regularly with employees who have been recently terminated denied further access. Computers responsible for payroll processing must also use a professional, corporate level anti-virus scanner to ensure they do not become infected. Every company computer should use filters for email spam and employees should be kept up to speed on phishing schemes.

You will also want to regularly perform an audit for payroll. An internal audit is one which is conducted by someone within the organization, while an external audited is carried out by someone outside the company. The purpose of an audit is to ensure the process and numbers are accurate. Employees must also be instructed never to share their personal details with others, even their co-workers. Some companies still maintain their payroll data in physical paper documents, and while these are protected from cyber thieves, you still have to worry about traditional theft. Therefore, physical payroll documents should be placed in filing cabinets which are locked and only accessible with certain keys. Only specific people should have keys to these cabinets and a paper shredder should be used when physical documents need to be disposed of.

Tips On How To Handle Payroll Advances

payroll advances

Oct 10th, 2017 by TRAXPayroll

Eventually even the best employees will find themselves dealing with problems outside of work, which are significant enough to interfere with their duties. This will typically come in the form of illness, a death in the family, or another catastrophic event that will require them to take time off work. The employee may find that the savings they have is not sufficient to cover the emergency they’re dealing with. In this scenario the employee may request a payroll advance from you to help them, but before you grant it to them here are some things to consider.

How Does A Salary Advance Work?

The advance is a loan which is provided to employees. It is taken out of wages that you intend to pay them in the future. It differs from the typical loans that are given between friends or family members. Whereas a friend or loved one may back you back at some future time once they get the money, there is no specific time in which this is expected.

An advance from an employer, on the other hand, is much more formal. There will be repayment terms which you’ll be expected to meet, with consequences if you do not. The repayments will usually be taken out of your future earnings, and you can use an entire paycheck to pay it off or spread the payments across multiple checks to keep some funds in your pocket. No employer is required by law to give such advances to their employees, but there are a number of best practices that should be followed.

Best Practices For Payroll Advances

Favoritism should be avoided when it comes to issuing these advances. In other words, if you’re willing to give it to one employee then you should also be willing to grant it to all of them. Generally, it is best to maintain a policy which is established so that everyone can be held to the exact same standards. For example, employees should work for you for a minimum time period before you’re open to granting them a loan, such as 12 months.

You should also set limits on how much an employee can request. It obviously doesn’t make much sense to issue an employee an advance which is substantially higher than their monthly or quarterly earnings, because then they can quit and you will never get the money back. Limits should also be placed on the number of times that an employee may request an advance within a single year.

Also, another critical factor to keep in mind is that when you issue an employee an advance, the deductions that you take out of their check must not result in them earning less than the federal or local minimum wage, otherwise you would be in violation of the law. You should also consider charging interest on the advance for the simple courtesy of providing the service along with the paperwork that you will be required to process.

How To Measure The Effectiveness Of Your Payroll Processes

payroll processes

Sep 26th, 2017 by TRAXPayroll

Many small business owners desire to improve their payroll processes as much as possible. This ensures that employees get paid on time and in the correct amounts. Below are some tips that will help you achieve this.

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Comparing Payroll Software & Payroll Outsourcing

payroll software

Aug 31st, 2017 by TRAXPayroll

Payroll is one of the most important functions a business is responsible for, and it is critical to make sure it is done correctly. As such, many businesses choose to either outsource the process to a third party firm or use payroll software to streamline the process. Below are some things you should know about both options.

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Understanding Mandatory & Voluntary Payroll Deductions

payroll deductions

Aug 17th, 2017 by TRAXPayroll

Payroll deductions are costs which are applied to the checks of employees every pay period. This means that the employee’s gross pay will always differ from the net pay, due to these deductions. Some deductions are mandatory while others are voluntary. While some deductions are levied by the state, others are federal. Below is a list of them.

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Quick Guide On Payroll Taxes In California

payroll taxes in California

Aug 15th, 2017 by TRAXPayroll

Payroll taxes in California are distinct from other parts of the country. It is one of many costs which extend beyond employee wages, and employers must know how to compute them, as well as what to contribute, withhold and the proper filing procedures. Below are the most important things you should know.

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Do You Need To Keep Payroll Records Forever?

payroll records

Jul 25th, 2017 by TRAXPayroll

Many employers have questions about payroll records and how long they should be kept. The Internal Revenue Service has its own list of requirements, which you need to know. Here’s the answers to the titular question, as well as other noteworthy payroll record related questions.

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Best Practices For Maintaining Employee Payroll Records

employee payroll records

Jul 18th, 2017 by TRAXPayroll

Record keeping is a fundamental aspect of running a business, especially when employees are present. Their records must be correctly maintained and stored in the right location and format. Below are some additional practices which are highly recommended for maintaining employee payroll records.

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How New Startups Can Tackle Payroll Setup For The First Time

payroll setup

Jul 11th, 2017 by TRAXPayroll

Payroll setup is a process that every startup has to undergo at some point. Many business owners aren’t familiar with this, and may delegate the task to a manager or HR staff member. Regardless, it is important to familiarize yourself with the steps involved as payroll is one of the most important aspects of your business.

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Stamping Out Payroll Fraud In Your Organization

payroll fraud

Jun 20th, 2017 by TRAXPayroll

Research has shown that as much as 5 percent of corporate revenue is lost each year due to payroll fraud. Whether you’re a startup company or Fortune 1000 firm, such losses can have devastating consequences to the long term success of the organization. Below are some techniques for eliminating fraud in payroll.

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