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Thread: Who or What Department Prepares and Processes your payroll?

  1. #1
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    Default Who or What Department Prepares and Processes your payroll?

    I used to be employed with a large international pharmaceutical company where payroll computation and processing is done by the HR department. This practice ensures confidentiality in payroll/salary as information about compensation/benefits is limited to a few people in the HR department. With the reporting requirements of our tax regulatory body, however, the task of summarizing monthly and annual payroll information per compensation type has become more tedious. In the company I am currently connected with, the HR prepares the payroll sheet but it goes to me for checking before it's passed to the executives for approval. To be honest about it, there was never a payroll computation or tax reporting that was at least 90% accurate. The HR people can only reason out that they were not trained to handle tax reporting or payroll preparation in school.

    In the furniture company I was with, it's the Accounting department that prepares the payroll computation, the mandatory remittances, and the tax reporting part. In the large construction group I've been with, the payroll and reporting is outsourced to a large auditing firm.

    Can you share what's the common practice in your country or company and what do you think is the better practice?

  2. #2
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    Default Re: Who or What Department Prepares and Processes your payroll?

    In our company earlier it was the responsibility of HR people to take care of payroll management. But nowadays we use ORACLE based payroll system which is handled by Finance and Accounts department. They do the end-to-end processing and there is no confusion at all. Employee attendance is also being captured automatically through biometric attendance system.

    But the bad effect was that HR and Admin manpower was cut down to less than half of its strength. There is nobody required for time management, attendance recording and everything will be taken care by machines. A lot of people lost jobs due to automation and outsourcing in our company.

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    Default Re: Who or What Department Prepares and Processes your payroll?

    Our payroll is handled by Finance. Hr handled hiring firing, raises etc, and tell Finance about it, but the actual process of sendinf out the payroll is entire inside Finance. This is partly because we pay by bank transfer so we have to make sure those employee details are kept confidential, and Finance is more secure than HR. Giving HR the ability to perform bank transfers just leads to another security risk and somewhere else we'd need to track in case of a breach.

  4. #4
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    Default Re: Who or What Department Prepares and Processes your payroll?

    The finance department is always responsible for the payroll. However, the human resources sector does a survey of the employees active in the company (making the list always up-to-date). This control is essential so that no undue payment takes place and the company remains aware of the number of employees it is hiring to date.

    The dynamics between the human resources and finance departmen work perfectly. So, I'll keep doing like this.

  5. #5
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    Default Re: Who or What Department Prepares and Processes your payroll?

    Things sure have changed over the years, and even a couple of years ago it seems like most companies did their payroll internally, but these days it is almost always contracted out, at least that is the way it is here.

  6. #6
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    Default Re: Who or What Department Prepares and Processes your payroll?

    In all the companies I had worked for, it is the Payroll section of the HR department that processes the payroll. The auditing is handled by the Auditing department and the distribution is handled by the Payroll section. There is also a senior officer that signals the approval before the distribution, more often a vice president. But with the popularity of the ATM bank accounts, the distribution is now forwarded to the bank which credits the money to the ATM accounts of the employees.

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    Default Re: Who or What Department Prepares and Processes your payroll?

    In my company HR department proceeses payroll with the help of automated payroll software. It saves time and efforts of HR department and reduces manual calculation errors.

  8. #8
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    Default Re: Who or What Department Prepares and Processes your payroll?

    The Human resource and the accounting department both handles the paycheck and payroll processes. But, these days, I observe that most companies outsource the payroll.

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