With increased complexity and frequently changing tax and social security laws, issuance of notifications, press releases, annual circulars and judicial pronouncements, payroll administration, finance and HR teams are under tremendous pressure to ensure proper payroll compliances.
It has been observed that these evolving laws and amendments, at times are applied inappropriately, thus creating a non-compliance exposure for the company and amidst the pressure of regular monthly, quarterly, and annual payroll activities, it practically becomes difficult to trace inconsistencies and gaps.
Even in cases where the payroll processing has been outsourced, it is often noted that the payroll vendors are either not updated with such technical and regulatory changes or may inappropriately apply the same.
A payroll diagnostic exercise therefore proves helpful in detecting the potential gaps/irregularities in payroll processes, investigating the reasons, weeding out non-compliances and thereby help in ensuring efficacy in the payroll function of an organisation. Payroll diagnostic also helps assess vendor competency in case of payroll outsourcing.
