No matter whether your company is big or small, a business must be able to manage all the company’s payroll obligations easily and efficiently. The concept of payroll however is not solely tied to the idea of ensuring their employees’ wages are accurately calculated and issued to the employees. But also, the business must ensure that the payroll process is completed in compliance with Hong Kong’s or any country’s employment laws and regulations. For many smaller to medium-sized businesses, the ability to dedicate a team of individuals or any time and resources to this endeavor is sometimes too difficult to deliver on as the management of payroll is too time-consuming and equally exhausting no matter what industry you are in. To meet this problem, outsourcing your payroll to payroll outsourcing services is a great solution allowing you and your business to focus on the core business strategy. In this article, I will outlay what is payroll and how it is done in Hong Kong, the benefits of having HR & payroll services for your business and how HR managers can ensure the calculation process for the employees is done accurately.
The term payroll is attributed to the number of employees that receive compensation from their employers in return for services rendered in their employment. For the accountants, payroll also refers to the total amount of compensation these employees are entitled to receive for their services.
In Hong Kong, this is performed on a month-by-month basis as it is set in the terms and conditions of the employee’s employment contract. In this contract, these terms include the number of hours an employee must work for a set time, their benefits and even the payment arrangements. The whole payroll process, therefore, requires the employer or payroll manager to calculate the amount of remuneration each employee is entitled to and the amount needed to be given into the employee’s hands or bank account. On average, the Hong Kong payroll process takes up to one workweek to complete.
One of the most important things a HR manager must remember when undergoing the payroll process is that employers must adhere to their Mandatory Provident Fund (MPF) obligations. In Hong Kong, employees and their employers are required by law to make a monthly contribution to the employee’s MPF scheme. If you have read our previous Primasia’s blog article on the ‘Mandatory Provident Fund’ the contribution calculates to around 5% of the employees’ relevant income. If the employer does not abide by MPF obligations the MPFA also known as the Mandatory Provident Fund Scheme Authority will impose a 5% surcharge on default contributions and the surcharge will go directly into the employee’s MPF account. This is both a criminal offense and costly for the employer if not done correctly.
Outsourcing your payroll services is when a company or an entity engages and works with an external professional services provider to manage all aspects of the original companies’ payroll process. Because of these services, it has allowed many businesses of all sizes to enjoy high-quality payroll services at a much more affordable and digestible cost in comparison to if the business/ entity were to handle its own payroll solution in-house. With some of the benefits of having HR and payroll services, if the business is currently undergoing small and sustainable growth, it may require costs to be lean and efficient. Therefore, need to minimize the cost of managing their internal administrative tasks in an offer on spending heavily in other areas. By investing in an external team, the business will be able to free up even more investment and look toward investing in other core business areas. Outsourcing your payroll will also free up important human resources and accounting personnel. This allows you to get them to focus their time and resources and use it in other areas such as more strategical tasks that could be the difference in a company’s bottom dollar. Due to the nature of payroll slips, employers only need to contact these payroll specialists for approving each payroll payment. This means that the repetitive tasks in the payroll process will no longer require a company to provide resources for it. Lastly, professional payroll service providers such as Primasia will typically already have a wide extensive amount of experience with understanding local employment laws and regulations. Here at Primasia, our expert accountants have been handling HR and payroll clients for over 3 decades. By outsourcing to Primasia and other individuals, you as the employer are lowering your risk of non-compliance managing both your own obligations and the potential penalties/ fines associated with them.
Understanding payslips can sometimes be very confusing to the average employee. While some may never look at their payslips, others will often go over theirs with strict precision and care, looking for any mistakes or errors. It is because of this HR managers will need to be able to explain and be able to address any queries your employees may have and demonstrate that your payroll processes are accurate consistently. One of the most frequently asked questions to HR manager regarding their payroll slip is how the payroll team calculate their pay. According to our payroll experts, one of the biggest things that can confuse people is the hours that appear on the payslip can be generally averaged across 12 months for salaried employees. If the employee worked a shorter month to what is consistent then that could cause mistakes in the calculation stage. Therefore, it is important that you are clear on how your payroll team calculates pay.
Another way HR managers can ensure payroll processing is smooth is to improve clarity around employer-paid benefits. According to our payroll experts, there are lots of questions about what exactly the employers themselves pay and what they pay regarding what is shown on the payslip. There are still a lot of payslips that do not cover all the factors in enough detail.
Why are PaySlips and HR Payroll process so vital?
The Payslip and HR payroll process are vital for many reasons, it is important for the sake of employee engagement so that your employees fully understand their compensation. This also builds trust in your company and its perceived value as an employee. It also saves you time by offering all the information upfront. Conversely, you may also as a business owner deem it best to invest and look towards external help with your payroll solutions. A professional payroll service provider like the people here at Primasia can provide you experience and expertise that guarantees that any one of our clients does not have to invest in time-consuming and excessive resources to perform the simplest of tasks. Focusing on one’s core business can be difficult with constant HR & payroll routines that need to be taken care of. While you focus on your core business, Primasia will provide you peace of mind and manage your payroll solution.
Do you want to learn more about Primasia’s HR and Payroll solutions?
We are more than happy to assist you with understanding how we can help your company so you can focus on what your company is truly about in your core business. For more information about HR and payroll services, please click here to visit the Primasia Corporate Services website and learn more about our company payroll services in Asia, as well as the wide range of other services we offer.
Primasia Corporate Services is a Hong Kong based corporate services provider that has been supporting its clients in Asia for over three decades. Among several of our services, Primasia Hong Kong (Primasia) offers our clients Online Accounting services, China Company Incorporation services, Virtual CFO services, MPF Filing services, Profit tax filing services, Employment return filing services, Wholly Foreign-Owned Enterprise (WFOE) incorporation-, and registration services etc. One of our services which we are proud to be offering our clientele is our investment visa and working visa Hong Kong services.
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