A payroll audit is when a company’s payroll system is being reviewed to guarantee that employees are being paid properly and that the employer is compliant with labor laws.
A payroll audit is when a company’s payroll system is being reviewed to guarantee that employees are being paid properly and that the employer is compliant with labor laws.
Payroll audits should be completed on a regular basis. Completing regular payroll audits reduces the risk of non-compliance in regards to tax reporting and pay rates.
Payroll audits include, but are not limited to, the following:
Overall, there are many benefits for employers to conduct payroll audits. Doing these audits ensures that an organization adheres to legal requirements, follows best practices, and identifies possible areas for improvement in the payroll processes.
A payroll audit does a comprehensive examination of a company’s payroll system. During this, an auditor will identify any areas of non-compliance. By catching these errors early, employers have the opportunity to align their payroll with local employment regulations.
Because a payroll audit identifies any payroll errors, an organization can correct them. As a result, it minimizes the risk of financial or legal penalties that are associated with non-compliance.
An audit may present employers with the opportunity to automate processes and make the payroll system more efficient.
There are numerous steps involved in conducting a thorough payroll audit. This includes:
With the complexities surrounding international payroll, many employers choose to outsource their payroll and work with a global payroll provider. Borderless, an EOR, can help with that. Book a demo today.
