With payroll costs rising as hospitality workers return to work, GroForth CEO Sarah Daly shares some tips for business owners.
Payroll is a major cost for hotels, restaurants, cafes, bars, clubs and guest houses. If you are in this sector, you know all too well the impact that Covid-19 has had on your business, your employees and yourself. Now, as the lockdown restrictions ease and customers and workers return, there are additional costs to cope with. Recently, I highlighted a few key issues to be aware of as you re-hire employees and prepare to reopen your business including updates to the Temporary Wage Support Scheme, details of the Government’s Work Safely Protocol and the need to update sick leave policies to take account of Covid-19 requirements. Today, I want to focus specifically on payroll which, because of the high numbers of people employed, is often the biggest cost centre in hospitality businesses.
Pay day queries
Obviously, the more employees you have, the more complex payroll becomes. Calculating pay correctly for each employee is not easy when you have a mix of permanent, part-time and casual workers, different pay scales, rosters, shift work, benefits and tips to take into account on every pay run. Even with good payroll systems in place, high turnover of staff and frequent changes in hours worked can result in errors so it’s not surprising that dealing with pay day queries is a common and time-consuming occurrence in many hospitality businesses.
How can you avoid payroll problems?
So, what can you do to avoid mistakes and make your payroll process more efficient? The good news is that if your payroll administrator is suitably qualified and experienced, you should be able to avoid many common problems by implementing and adhering to good practices. In an ideal world, where your system is properly set up and staff are trained to enter data accurately and on time, it should be possible to deal efficiently with employees joining or leaving, changes in hours worked, pay due, worker classifications and so on. In reality, however, even with good systems in place, roster changes and high turnover of staff means that mistakes inevitably happen from time to time so it’s important to implement safeguards (like regular payroll reviews) to identify and correct errors quickly. This helps prevent minor glitches escalating into more serious problems.
Something you might overlook is the need to have adequate cover in place for times when your payroll administrator may be on leave or absent. This is a key issue to address because if mistakes are made you could end up overpaying or owing back money to employees. In addition, errors in your payroll submissions to Revenue could create further problems down the road.
6 ways to minimise payroll errors
- Make sure your payroll administrator understands how to operate payroll correctly.
- Eliminate manual record keeping where possible to reduce the risk of human error.
- Ensure details for all employees (PPS, contact information, etc) is accurate and up to date.
- Check that employees are correctly classified and on the right tax band.
- Analyse pay day queries to identify and address problems in your payroll processes or system.
- Check payroll data regularly to ensure that changes are being properly processed.
Remember each time that you make a payment to an employee, you have to submit the relevant details to Revenue. This includes the payment amount, payment date and the Income Tax, Universal Social Charge and Local Property Tax deducted. You also have a statutory obligation to ensure your employees receive a payslip showing their gross wage and details of all deductions.
Make the most of your payroll data
For planning purposes, analysing what you spend on payroll can yield valuable management information. It can help you understand your costs and enable you to work out how to manage them in a more efficient manner—for example highlighting trends such as times when costs can be saved or when additional resources may be needed. You can also use payroll data to help create career paths for key employees. This can be useful for recruiting and retaining staff.
Many hospitality businesses find payroll is too time-consuming and complex to manage in-house so they outsource it to a payroll bureau service. When choosing an outsource payroll partner, it’s important to make sure they are properly qualified and have the resources to provide a reliable, timely and confidential service. Remember you still need to have processes in place to enable you to provide accurate information to your service provider for every pay run.
GroForth provides comprehensive payroll management services for hotels, guest houses, restaurants, cafes, bars and clubs. For information on our services and to find out how our team help businesses like yours, please get in touch!