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What are the Responsibilities of HR and Payroll Teams?

HR and payroll functions have always been crucial for businesses. However, with a growing focus on employee satisfaction and an increasingly complex legal landscape, they have become even more important.

HR and payroll operations often overlap with each other. This HR payroll collaboration makes it easier for businesses to comply with labor regulations.

For example, the HR team manages performance, but it is the payroll team that ensures the timely payment of performance-based incentives. Similarly, HR professionals help establish policies that comply with regional regulations. At the same time, the payroll team focuses on the processes involved in compliance management, like tax deductions.

Read on to understand different HR and payroll responsibilities and how your organization can increase operational efficiency by collaborating on HR and payroll functions.

Understanding What the HR and Payroll Functions are

The HR team focuses on the administrative practices. For example, benefits administration. On the other hand, the payroll team handles operational aspects, such as salary processing.

As mentioned, HR and payroll professionals also collaborate. After a candidate is hired, HR professionals focus on providing a personalized onboarding experience, and payroll professionals collect information related to tax filings.

Similarly, HR leaders enhance employee satisfaction by improving employee engagement, while payroll staff disburses salaries promptly, thereby also contributing to improved employee satisfaction.

In many organizations, HR and payroll teams are separate. In others, they operate in a hybrid HR payroll model, where some HR functions overlap with payroll functions.

Some organizations also fully integrate HR and payroll teams to increase operational efficiency and improve performance.

What are the HR Responsibilities?

HR professionals oversee various operations, including recruitment and onboarding, compliance management, and training and development. They also help establish company policies and foster positive employee relations.

Recruitment and Onboarding

Recruitment and onboarding are the key HR responsibilities. In recruitment, HR managers post job openings, review applications, and conduct interviews with potential candidates. In onboarding, the professionals enroll a candidate in an organization by gathering personal and professional details.

Employee Relations

Another key HR responsibility is to improve employee relations. HR managers achieve this by:

1. Addressing employees’ complaints and solving them promptly,
2. Taking disciplinary actions to deal with issues related to harassment and workplace safety, and
3. Promoting internal feedback.

Training and Development

HR leaders focus on two aspects while implementing training and development programs:

1. In training, they identify skill gaps and attempt to anticipate future trends to design tailored training programs that meet these needs.
2. In development, they identify potential leaders based on various key metrics and establish a talent pipeline to manage succession.

Compliance and Policy Management

A Forbes article states that failing to comply with regulations like GDPR could cost an organization 4% of its global annual revenue. These findings underscore the importance of adhering to regional laws.

HR professionals adhere to regional and global laws by:

1. Calibrating their policies with industry standards and legislations,
2. Updating their organizational policies about leave, taxation, data security, and minimum wages, among others.

Benefits Administration

The HR team also manages employee benefits. For context, employee benefits include life insurance, disability insurance, health insurance, loans, discounts on products or services, and paid time off, among others. HR professionals create benefit packages and train employees on how to utilize these benefits.

What are the Payroll Processing Responsibilities

Core payroll roles and responsibilities include:

1. Salary processing,
2. Complying with tax regulations,
3. Record keeping,
4. Disbursing salary, and
5. Reporting.

Salary Processing

Processing salary is one of the essential payroll responsibilities. It includes calculating work hours, calculating arrears and other claims, as well as deducting various taxes. Many businesses rely on integrated payroll systems to speed up salary processing.

Tax Compliance

Different regions have different tax regulations. The payroll team monitors changes in tax regulations and calculates tax deductions accordingly. Some examples of tax deductions include Provident Fund (PF), Tax Deducted at Source (TDS), and Professional Tax.

Record Maintenance

Maintaining accurate records is a crucial payroll function, as they are essential for compliance audits. Payroll heads ensure that all the documents related to payments, deductions, claim settlements, and work hours are accurate and comprehensive. Many businesses also use cloud-based software for digital record-keeping.

Disbursement

The payroll team also facilitates timely and accurate payments. While doing so, they rely on various services, such as accounting software, for calculating salaries. They transfer salaries as direct bank deposits by integrating banking and accounting APIs.

Reporting

Payroll reporting is yet another important function. The payroll team helps in generating reports related to tax deductions, total labor costs, and benefits administration. Payroll reporting is critical, as it helps address issues related to turnover.

HR Payroll Collaboration – Improving Organizational Efficiency

HR and payroll teams should collaborate to support informed decision-making and enhance the operational efficiency of their organization. Reputable organizations rely on cloud-based softwares for digitizing their HR and payroll functions and for seamless collaboration. factoHR, a cloud-based payroll software, can help you automate all of your HR and payroll functions. It offers state-of-the-art features such as:

• Single-click payroll processing: Ensure accurate and efficient payroll processing with guided, single-click payroll processing.
• Stay informed about changes in employee legislation with real-time updates.
• Comply with new or old tax regimes with automated tax deductions and ready-to-file tax reports.
• Become audit-ready with digital, secure, and on-the-go records.
• Disburse salary in a downloadable PDF. You can also distribute payslips in an employee’s vernacular language.
• Direct bank deposit: factoHR integrates with banking services, allowing for direct salary transfers to the employee’s bank account.
• Off-the-shelf integration with performance modules facilitates performance-linked payroll.
• Generate customizable payroll reports for improving employee turnover and performance, and reducing workforce expenses.
• Ensure the security of employee data with end-to-end encryption and multifactor authentication.
• Self-service portal for viewing and downloading payroll information, such as tax declarations.

factoHR is a one-stop solution for performing hassle-free HR and payroll functions. Designed for user-friendliness, security, and flexibility, it is a simple yet smart solution for payroll management.

Conclusion

HR payroll responsibilities are different but interconnected. HR responsibilities include recruitment, employee relations, and benefits administration. Payroll functions consist of salary processing, tax compliance, and record maintenance.

An integrated HR and payroll system can give an organization a considerable advantage, as it enhances operational efficiency and facilitates data-driven decision-making. It would also make it easier for you to comply with regional and global regulations.

Streamline your HR and payroll functions with an integrated payroll system to drive organizational growth and efficiency.

FAQs

What is HRMS?

An HRMS is a system which manages all the HR activities like payroll management, performance appraisal, attendance and leave management and even employee engagement. Some advanced HR solutions also assist in decision-making.

What is Payroll?

Etymologically, payroll is a list of employees who need to be paid. However, payroll in HR management also covers other processes like calculating tax and administering benefits to employees.

What is a Payroll Cycle?

A payroll cycle is a recurring frequency of time in which an employer compensates employees. Also known as pay cycle, it includes in-hand salary and other components like deductions and benefits administration.

What are the Responsibilities of HR in Payroll?

The HR department performs the following responsibilities while managing payroll. –

1. Keeps track of labor regulations.
2. Improves employee engagement by addressing payroll related queries.
3. Provides employee compliance training and spreads awareness about employee regulations.
4. Maintains employee records for compliance audits.
5. Administers benefits to employees.
6. Implements payroll-linked performance incentives.

What is the Difference between Payroll and Salary?

Payroll is a larger process of compensating employees. While salary is a component of payroll. Payroll includes components like tax deductions and insurance and travel claims. In contrast, salary only includes the components like incentives and payment for hours worked.

What Job Skills and Qualifications are Needed for Human Resources?

HR professionals need a diverse skill set with the following skills. –

1. Professional skills such as knowledge of employee laws and best practices and talent management,
2. Technical expertise in HR systems like HRIS,
3. Leadership skills such as decision-making, problem solving, strategic thinking and people management,
4. Soft skills such as verbal and written communication,
5. Academic qualifications like bachelor’s in HR, masters in business administration or masters in other disciplines, and,
6. Organizational skills like time management.

What Job Skills and Qualifications are Needed for a Payroll Administrator?

A payroll administrator should ideally have the following qualifications. –

1. Expertise in payroll, ERP and accounting systems like Tally and SAP,
2. Knowledge of basic accounting and finance principles,
3. Comprehensive knowledge of payroll compliance laws related to tax deductions and other employee rights,
4. Analytical thinking,
5. A keen eye for details,
6. Time management,
7. Interpersonal skills, and,
8. Bachelors in finance or accounting.

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