One of the primary responsibilities of the HR department is to maintain employee records and regularly keep them updated. It is not just a good practice but it is also made mandatory by the law. These records help companies gather and analyze comprehensive information about their workforce at a micro as well as macro level.
How to Maintain and Update Employee Payroll Records
Apart from the legal implications, maintaining accurate and updated employee records helps employers save time while performing administrative duties. These details can also come in handy during the recruitment process, identifying gaps in skills, availability of resources or at the time of separation. It is important to have acute understanding of available human resources to efficiently administer their business and maintain productivity.
Keeping Employee Records
Keeping employee records accurate and up to date is essential for your business, especially when considering all the state and federal filing requirements for employee taxes. Otherwise, you’ll have a hard time filling out all the necessary forms and providing quarterly detail on your employees and your payroll.
The detailed individual records you keep on each employee should include this basic information, most of which is collected or determined as part of the hiring process:
- Name, address, phone number, and Social Security number
- Department or division within the company
- Start date with the company
- Pay rate
- Pay period (weekly, biweekly, semi-monthly, or monthly)
- Whether hourly or salaried
- Whether exempt or non-exempt
- W-4 withholding allowances
- Benefits information
- Payroll deductions
- All payroll activity
Now Read: Applying for A Tax Debt Compromise
Maintaining Your Employee Journal
You may want to add other columns to your employee journal to keep track of things such as:
- Non-taxable wages. These include health or retirement benefits that are paid before taxes are taken out.
- Benefits. If the employee receives benefits, you need at least one column to track any money taken out of the employee’s check to pay for those benefits. In fact, you may want to consider tracking each benefit in a separate column.
- Sick time
- Vacation time
- Overtime
Clearly, these employee journal sheets can get very lengthy very quickly. That’s why many small businesses use computerized accounting systems to monitor both payroll and employee records.
Contact PATC Today
If you are looking to maintain and update employee payroll records, contact PATC today. We offer a number of professional services, including payroll services bookkeeping, business plans, investment advice and more- contact PATC today.
Now Read: Completing the Financial Statements Engagement In Compliance With The Legislative Requirements