What is a Payroll Administrator?
A payroll administrator is a finance professional with knowledge in administration and accounting. Generally, payroll administrators are in charge of the upkeep and maintenance of payroll within a company. That includes ensuring that timesheets are accurate and up to date, managing employee data, and that ensuring payments are made on time. Payroll administration is an incredibly important aspect to a functioning business, and the administrators themselves play a vital part.
What Are Payroll Administrator Duties?
On the daily, a payroll administrator has an array of duties from calculating payable hours, withholdings, bonuses, or deductions. Generally, payroll administrators need to be comfortable with detail oriented, complex tasks, and numbers. Familiarity with the financial intricacies is key to a quality payroll administrator, as well are organizational and administrative skills. Ultimately, as a finance professional, payroll administrators need specific knowledge and oftentimes qualifications in order to enter the field. These include payroll and VAT training, VAT referring to the value-added tax, is a tax on payable goods or services. Payroll administration courses specifically focus on the operation of the tax system, how its calculated, and relevant accounting processes. Though oftentimes there are computer programs that help in the daily arithmetic and tracking of regular payment, a payroll administrator must be aware of what these do, and how, as well as comfortable with using them. That is, these payroll courses and qualifications generally go into the minutia of tax and payment laws and regulations, how to work with and around them, and how they apply on a relevant basis.
On top of the knowledge and skills of accounting, tax and payment regulation, and the computer skills necessary, payroll administrators oftentimes are also tasked with being the point of contact between employees and the business as a whole to answer questions and respond to concerns with payroll. This means that on top of the administrative and financial skills necessary, there is a level of personal touch, and ability to work well with people. Not only are payroll administrators finance professionals with a detailed knowledge of accounting processes and organizational skills, but also vital aspects to the running of a company in terms of employee relations. The fact of the matter is, employees need to get paid, and in that, the job of payroll is a simultaneously employee centred and numeric role.
How is Payroll Tax Calculated?
If you are familiar with receiving a payslip, than you are definitely familiar with the taxes on what you earn. These payroll taxes fall into three major categories: income tax, universal social charge, and pay related social insurance. It is vital to, as a payroll administrator, understand the payroll tax calculation and how they relate to the accounting within the business.
The first step in calculating payroll tax is one’s income tax. This is based on the amount one earns after pension and permanent health insurance are deducted. The standard starting tax rate is 20%, and any income about this rate goes to 40%. From here, one’s gross Income Tax Is calculated by adding the amounts taxed at the standard, and higher rate of tax (20% and 40% respectively). Any tax credits you have are then used to lower the amount of tax that you pay.
If you are an Irish Resident, you have a Personal Tax Credit given to you by Revenue. This is standard, and given to all residents earning money in the state. Given outside circumstances, you are able to apply for additional tax credits, but be sure to check revenue.ie to see what credits you are eligible for. Similarly, not all tax relief is necessary a credit, there are credit amounts listed in tax rates, bands, and relief charts. For more information on tax credits, visit revenue.ie.
After your income tax is calculated, there is then the Universal Social Charge, which is also dependent on your income threshold. Visit https://www.revenue.ie/en/jobs-and-pensions/usc/calculating-usc.aspx to calculate the USC tax rates that apply to you.
Finally, the third layer of calculating payroll tax is the PRSI (pay related social insurance), which, again, relates to the amount you earn. To check the level of PRSI that applies to you, visit https://www.gov.ie/en/publication/80e5ab-prsi-pay-related-social-insurance/.
To learn more about the Irish tax system, and what you are likely to be paying in tax, visit revenue.ie, where you can calculate the amount of each tax you are expected to pay. While at first it is confusing, it is incredibly important to understand, as an employee, how your taxes work.
Which Are The Best Payroll Systems?
Another vital thing to consider when looking at payroll administration is what software to use when calculating payroll. Using a good payroll software, and understanding how to use it, can save massive amounts time, especially considering the complexity of payroll administration as a whole. The top ranked payroll software, according to accountantonline.ie, is BrightPay, which emphasizes its easy-to-use interface, as well as focusing on maintaining and managing payment of current employees, while the administrator takes more of a hands on role when employees join or leave.
Other top-ranked software for managing payroll include SimplePay and Sage, which have email support, strong data storage, and allow employees to view their payroll information on an app or online. Choosing the right payroll software for a business is extremely important, thankfully, many of the top, most popular software are hugely helpful to managing the ins and outs of payroll. Especially considering the complicated nature of accounting, between the tax that gets calculated as discussed above, and managing any changes in an employees including hours and any raises or salary changes.
While choosing a payroll system or software, there are a number of things to keep in mind. Most importantly, are how well they work given the revenue structure, that they pay automatically and accurately, and that your data is safe and backed up. By using a software like the ones discussed above, especially at a larger company where there are more employees with various specific salaries, bonuses, or changes in payment, using a software like above can streamline the process as a whole.