How to manage the payroll of employees in Colombia

How to manage the payroll of employees in Colombia

Payroll is an important issue for companies incorporated in Colombia and emerging businesses. Today we will tell you the correct way to settle it. For that, accounting consultancy in Bogotá will be essential to optimize these settlements.

What is payroll management and what is its importance?

A payroll comprises the concepts reflected in money that a person receives for their work, calculated in biweekly or monthly periods. Collect the basic salary, plus any benefits, deductions or extra services that apply. So, managing it means liquidating it, considering all the necessary steps until the money reaches the employee’s hands.

In addition, workers have a decisive influence on commercial activities, especially if they are technical or service the public. For this reason, a satisfactory relationship must be maintained to keep them motivated to continue contributing their positive performance. How to do it? Paying them correctly and respecting their rights.

Most important steps to liquidate the payroll of your workers

Here is the information you need to know about paying your payroll.

  1. Get updated on the regulations. The laws governing the relationship between employer and employees are constantly changing. Don’t lose sight of any related regulations! Thus, remember to follow the payroll calculation and payment procedure established by the Superintendency of Companies.
  2. Follow the UGPP requirements. This unit oversees compliance with the mandatory contributions. So, include Social Security as an indispensable part in the payment of your employees (pensions, labor risks and others).
  3. Identify employment conditions and positions. Generate files to have the history of each worker since he was hired. This will help you easily remember the amount to pay, and which benefit or special contribution it is entitled to (monthly or annual performance bonuses).
  4. Keep track of overtime hours worked. On the other hand, to find out how much to pay per hour, use this formula: take an average of the ordinary time and add 25% if it was daytime, 75% if it was night, 100% in case of Sundays or day holidays and 150% for night work on holidays.
  5. Set periods where eventual benefits are paid. The payroll contributions or vacations can be divided under a system of work and vacation time, depending on the number of employees you have. The best thing to do is make a calendar so you don’t lose sight of it.
  6. Set up a payday. Some companies schedule to pay on the first Monday of the month, the last Friday closest to the fortnight, etc. To avoid confusion, the most recommended is to handle a fixed number (days 30, 31, or 15), and, in case of not being able, to pay the payroll the next business day.
  7. Inform your employees about their charges. Communication is an indispensable factor that improves harmony at work. To do this, hold weekly meetings where performance or changes in payment amounts are discussed.

How can an accounting consultancy help with the payroll?

Payroll is part of the budget and is accounted for in the same way as other expenses. In this way, settling it correctly allows you to have a good record of accounts. In addition, the taxes it carries are important when calculating the total income of the company.

For this reason, an accounting professional is the one trained to guide the administration of funds, as well as the timings and the most favorable distribution to pay workers. So, an accountant in Colombia not only performs an audit of the accounts but can also help make the payment process efficient.

If you precisely want to improve payroll management, or you are in the project of undertaking in the country, an accounting consultancy in Colombia is your best option to help you start without errors.