Local Payroll Experts Discuss Accounting for Bonuses
Many people who have never processed payroll before think the process is simple and there are few variables to issuing checks. However, if you have ever owned a business or worked with payroll in any way, you understand this isn’t the case. Payroll is a complex process which can be altered by the needs of employees, ever-changing tax laws, differing schedules and much more.
Two variables which can affect the payroll process from week to week are employee benefits and bonuses. Because paychecks can fluctuate due to these occurrences, they can throw a wrench into your payroll process if you aren’t careful and prepared.
As the East Bay’s premier team of payroll experts, we can help ensure your payroll process always runs smoothly. Because we’re asked often about benefits and bonuses, we wanted to provide some tips and best practices on how to deal with these components of payroll. Read on to learn how to ensure your payroll process can remain consistent and efficient.
Clearly Define Benefits and Bonuses
Bonuses and benefits are supposed to be the source of good feelings, positive morale, and employee longevity. However, bonuses and benefits which aren’t paid out or administered correctly can become a source of anger and division between a company and its employees. The best way to keep the positivity of benefits and bonuses is to clearly define them so everyone is on the same page. If you don’t already have an employee handbook which is easily accessible and understandable where these elements are clearly defined, we would encourage you to make this a priority. When everyone understands how they can earn extra money and what they are entitled to, it can greatly impact the effectiveness of bonuses and benefits in a positive way.
Stay Organized
Bonuses can represent a significant portion of an employee’s salary in many cases, and the benefits you provide for your employees often allow them to live with much less stress. Because these things are important to your people, it’s imperative for employers to be reliable and consistent in administering them. As a best practice, it’s important to have a system in place which tracks when people are eligible for bonuses. This can look different for certain companies, but having something in place which works for your needs can make sure you never miss bonus payments. When it comes to benefits, organization is key to tracking things like retirement accounts, paid time off, health insurance, and more.
Encourage Questions and Transparency
Your employees should feel comfortable asking about benefits, and they should understand where they stand in relation to bonuses earned. Leaving people in the dark about these important components of their compensation will only lead to division, so encourage them to approach HR, ownership, or their supervisors if they have questions.
Trust Payroll Experts
If you are having trouble tracking benefits and bonuses, or you would like professional assistance with every part of the payroll process, we can help. To learn more about what we do and how we can assist in making your business more efficient, contact us today.
