At the end of every year, most people look forward to spending some time with their families and friends. However, it is at this time that small business owners prepare to calculate their employees’ annual leave and bonus payments. These calculations can often take days to do correctly. With the help of an accounting system from QuickBooks, you can greatly reduce the amount of time it takes to calculate your employees’ annual leave and bonus payments, giving you the chance to spend additional time with your loved ones.
Continue reading to learn more about the how a payroll system from QuickBooks can help you pay your employees at the end of the year.
Using a payroll system to calculate employees’ leave
Legally, an employee is allowed to take a certain number of days of leave with full pay. The law states that employers must grant every staff member 21 consecutive days of leave during the leave cycle (12 months) or 1 day for every 17 days worked However, should a staff member’s employment be terminated before full leave has been taken, the employee is entitled to leave pay for the remaining days.
A payroll system allows small business owners to keep track of their employees’ leave and thereby allocate leave fairly and evenly and pay employees correctly on their departure. The system automatically updates the amount of leave owed to employees, and managers or business owners can subtract leave days as they are taken.
If these calculations are incorrect, small business owners will find themselves in contravention of the Basic Conditions of Employment Act (BCEA) which can lead to legal issues.
Calculating bonus payments with a payroll system
When used correctly, bonuses are an effective motivational tool that can encourage employees to work hard for their company. While bonus payments are allocated according to merit and employees’ levels of work throughout the year, they are often calculated as a percentage of the respective employee’s salary.
It is also pertinent to remember that bonus payments are subject to tax requirements and business owners must ensure that the government receives the correct tax amount. A payroll system can help business owners calculate bonus payments to adequately reward employees as well as deduct the correct tax.
Moreover, business owners can keep their payroll system up to date with the latest tax regulations via the Internet.
Choose a payroll system from QuickBooks
QuickBooks offers a range of payroll software systems, including Quick Payroll and Quick Payroll Lite, that can help you to streamline your employees’ annual leave calculations and bonus payments.
Implement a QuickBooks payroll system today and ensure that you will have time to relax before entering the New Year.