Payroll audit services in Kenya
The business owner is interested in payroll audit services because it will become clear whether the company’s activities comply with the laws of the Kenya. An objective independent assessment of wage operations will show how efficiently the costs of the enterprise are formed and whether the financial results of its activities meet the expectations of top officials of the organization.
What’s a payroll audit?
A payroll audit is an analysis of a company’s payroll processes to ensure accuracy. Payroll audits examine things like the business’s active employees, pay rates, wages, and tax withholdings. You should conduct a payroll audit at least once per year to verify your process is up-to-date and legally compliant.
Generally, payroll audits are internal, meaning you or someone in your business conducts them. Performing internal audits can help you catch errors and prevent possible external audits later on.
After conducting the review, examine your payroll audit report. If necessary, make changes for future payroll processing. You may also need to retroactively make changes. For example, you might provide retroactive pay to an employee or remit more in taxes to the KRA.
Salary Payroll audit purpose
Salary is one of the main types of expenses of the organization. Errors in its calculation, for example, excessive additional charge, can lead to discontent from the tax authorities. Indeed, in this case it turns out that the income tax expense was overestimated, and, therefore, the organization did not pay income tax to the personal income tax budget.
In order not to force employees of the Federal Tax Service to come and independently verify the accuracy of the calculations and reporting, in all senses it is more profitable to get ahead of them and initiate an analysis of wages and thereby prevent all errors and subsequent losses. However, the point of a payroll audit services is not only that.
Payroll Audit Services Involves
Research and Assessment
Research and assessment of the impact of all components of the wage system on staff motivation
Verification
Verification of the validity and rationality of the use of various forms and methods of assessing employee labor under payroll audit function
Search for additional resources
The search for additional resources to increase labor productivity to achieve the strategic goals of the company.
Documentation Work
Fundamental work with documentation reflecting operations in accounting for accrual and payment of salaries.
Compliance Verification
Verification of compliance with legislation (labor, civil, tax);
Payroll Operations and Taxation
Establishing the degree of accuracy of accounting and taxation of payroll operations;
Benefits of conducting a payroll audit
So, why should you conduct a payroll audit? The better question is, why shouldn’t you?
Conducting a payroll audit regularly can help you:
- Prevent payroll fraud by weeding out ghost employees or mismarked time cards
- Catch manual errors made when entering numbers into a system
- Spot calculation mistakes if doing payroll by hand
- Realize you need to factor in a raise
- Remove terminated employees from your payroll
- Verify your tax withholdings are accurate
- Accurately account for paid or unpaid time off
- Compare hours paid to when employees clocked in
- Ensure you are compliant with employment laws (e.g., overtime pay)
