Many people make New Year’s resolutions to change undesirable behaviours or achieve personal goals. From a work perspective, payroll year end is also a time of year when we can reflect on our payroll processes from the previous year and evaluate what worked well and where we might want to investigate opportunities for change.
Review Payroll Team Performance
A mantra we often use in payroll is making sure our employees are paid ‘accurately and on time’. While this remains a key performance indicator, it should not be the sole method of evaluating the performance of the payroll team. It is also important to look at the amount of effort that goes into achieving this goal. What are your greatest strengths and are there ways the payroll team could improve its overall performance?
A few questions you can ask yourself at payroll year end to better assess performance are:
- How automated are your processes?
- Do you find there is still a substantial amount of manual intervention before data is finalized for your pay run?
- Was the year-end schedule communicated to stakeholders with clear expectations?
- Are stakeholders submitting information on time as per the schedule?
- Is payroll being informed about all benefits, allowances and reimbursements to employees to ensure the correct allocation of taxable income?
- How are payroll issues and problems communicated and how quick is payroll’s response?
- If there were any major payroll errors, what were the root causes and have they been corrected to prevent such problems in the future?
- Is there a payroll knowledge gap that is preventing better performance?
Automating workflow can provide many benefits such as reducing the risk of human error and improving the consistency and accuracy of data. However, if your automated processes require manual intervention, the data is exposed to possible human error, which can impact the integrity of the data. If this is the case, you may want to revise your processes consistent with business goals that were defined when the automated solution was chosen and implemented to determine if it is it still the best choice for today’s needs. It may also be an issue of end users requiring training to use the software effectively and retraining of payroll knowledge and/or testing.
Deadlines are essential in payroll and if your team is consistently tracking down missing data from stakeholders that is essential to complete the pay run, that is taking precious time away from your ability to review and validate information before closing the payroll file. Work with your stakeholders to determine what challenges they have in delivering payroll data and how you can work together to meet the required deadlines.
The number one issue on the Canada Revenue Agency’s (CRA’s) top 10 Payroll Audit Adjustment list is the failure to report payments that should have been included in employment income for the recipient. Communicate with your management to make sure they involve payroll in plans to change or introduce new compensation and benefit programs. As a payroll professional, you are the subject matter expert and an important resource to ensure the accurate reporting and taxation of employee remuneration.
What is the process for employees to ask questions about, or report errors in their pay? Making sure employees are paid accurately is the first priority, but it is also essential to consider the root cause of the error and put safeguards in place to ensure it does not happen again.
Review The Impact Of New Legislation
Payroll professionals should also review legislative updates to determine the impact that changes will have on current policies and procedures as they relate to payroll processes. Federal Budget 2017 included a legislative change enabling employers to make electronic T4s (e-T4s) the standard delivery method, without having to obtain employee consent. This change will improve the efficiency and effectiveness of payroll administration for all stakeholders with no additional cost to government.
Electronic year-end reporting slips are a payroll best practice, so if you are not already providing employees with electronic slips, the Canadian Payroll Association suggests you investigate doing so in order to enjoy cost savings, greater efficiency and increased security of employee personal information.
Employers in Alberta and Ontario are going to see significant changes in employment standards legislation coming into force in 2018. In addition to increases in the minimum wage rates, amendments to the legislation include:
- Changes to the eligibility criteria and calculation of statutory holiday pay
- Updates to existing job protected leaves
- The introduction of new job protected leaves
Employment standards legislation lays the foundation for the minimum standards of employment from which employers develop their own policies and procedures. To ensure compliance, employers must ensure their policies meet or exceed these minimum standards.
Another change on the horizon is the enhancement to the Canada Pension Plan (CPP), which will be rolled out over seven years starting in 2019. In addition to increased contributions for employees and employers, these enhancements may also impact employer pension and benefit plans that are integrated with the CPP program. Employers should begin reviewing their organization’s programs and determine what changes, if any, they may want to implement over the coming years.
Forewarned is forearmed. This year, make a resolution to prepare yourself thoroughly so that you can ensure a successful and compliant year-end.
This article is an an excerpt from Dialogue Magazine, which is received by members of the Canadian Payroll Association.