Payroll Systems – “If I’d known there was going to be math involved…”
Remember those “word problems” in math class?
If 2 trains leave the station going in opposite directions, and the conductor of train A buys 3 apples for 75 cents, and the conductor of train B buys 2 apples for 40 cents, is Jill older than Jane?
OK, maybe they weren’t that complicated in algebra class, but figuring out payroll can seem as confusing as anything our high school teachers could throw at us. And it is just as taxing (pun intended!) for employees as it is for payroll administrators.
At its core, it seems like payroll should be one of the most straight-forward HR processes. You count the hours your employees worked and then multiply by the pay rate. Or you take an annual salary and divide by 52. Numbers don’t lie! But payroll pros and business leaders have to make multiple calculations on multiple levels.
First, pay must be calculated for each employee, which can involve a complex logic problem.
Increasing regulatory complexity, down to the town and city level, enhanced benefit offerings with multiple optional elements to help attract and retain talent, and tight margins placing increased scrutiny of overtime can make calculating an individual paycheck difficult, let alone doing so for every employee in your organization.
In addition to the payroll math for the company and for every individual employee, payroll admins and bosses also have to be able to explain the whole process when individuals ask questions. And what if your employees want to do some scenario planning about how changes to their retirement withholding or overtime hours would affect their weekly paycheck? Not only is it a potential administrative time suck, but heaven forbid you to make a mistake!
“Who is FICA and why is he taking my money?” — Or if you’re feeling bold, “Employees and Cardi b. want to know where their money is going!” https://www.youtube.com/watch?v=-L-PR97rUWE
Surprises about money can only go one of two ways – elated when you have more than you expected, or angry, confused, and even scared when there is less.