Payroll Problems of Businesses in UAE

Whether the payroll schedule of the business is weekly or monthly, what you don’t want to hear as a business owner is a payroll issue that has caused your employee dissatisfaction. Issues that are related to payroll occur for several different reasons. There are those that can’t be resolved quickly like the others. As a business owner, you are to monitor the processes of your business and do it regularly. You have to make sure that your employee‘s level of satisfaction is high.

Below are the common issues related to payroll processing in UAE. You should avoid them at all costs, otherwise, the business is doomed to fail.

Management of company finances

It’s a fact that if a business does not have any cash-flow, it will fail very quickly. The company payroll won’t be settled or will be late. The delay of business in paying the wages of employees can put the business in the cross-hairs with local authorities. Over-staffing and overtime will most definitely break a business into half then destroy it. This is the reason why payroll service is essential. The management of company payroll that’s done by experts that are already skilled and experienced in the area will help any business manage its cashflow.

Incorrect setup of payroll system

Payroll can be very complicated, most especially if you have a large number of employees. It gets even more complicated with the labor and employment legislation changing more than you can handle or adapt. Not only are they subject to change but they’re also very difficult to understand. If you are handling your business’ payroll yourself, then you would want to ensure that you are up to speed with the withholdings and deductions of employees so you can keep the correct amount from the paychecks of employees every pay period.

Late payments to employees

Business owners are very busy. They’re wearing many hats. This is why it is very common for owners of businesses to miss pay periods. This is never good for a business and its team. Its reputation gets tarnished, especially with the local authorities as the Ministry of Labor keeps track of the timely payments for employees’ wages. It is a great idea to seek the help of service providers if you want to –ensure that you are fully compliant to your –legal obligations and that you don’t forget a payday. This way, you’ll be able to give your full attention and energy to the business’ core income-generating activities.

Poor recordkeeping

Payroll has to be integrated into a business’s overall accounting and bookkeeping system, most especially if you are just managing the company payroll yourself. This is because payroll affects the cash flow of a business. It is absolutely necessary that you know exactly how much money the business has in order to afford payments for employee wages.

Paying incorrect wages to employees

What you don’t want is to be caught giving the wrong amounts to employees. This can be either too little or too much. This usually occurs from tiny clerical errors. Sometimes, this happens as well as you or an employee makes mistakes. What you want is to be protected from any errors. A firm that offers payroll outsourcing in UAE can protect you from this from the fact that they’re experts in handling payroll and they are liable for any mistakes with payroll processing.

Missing a bank holiday

This is a common issue with small businesses or startups. What you don’t want is for you to miss a bank holiday. When you do, your staff members will suffer. If the pay period, for instance, falls on a bank holiday that is on a Friday, you’d want to arrange the payment of your staff members a day before. Remember that a bank holiday in UAE is not considered a business day with respect to payroll processing. Make sure you are always updated on scheduled bank closings so you’ll be able to make adjustments for your business’ payroll processing. You also have the option of having an outsourced firm for payroll processing to keep track of bank operating hours schedule for you.

Misclassification of employees

Many small businesses and startups employ hourly and part-time employees, freelancers or contractors, full-time workers, and seasonal or temporary employees. Knowing what is to be paid with the correct rate can be very tricky. In order for you to avoid any fee or penalty imposed by local authorities, seek the help of experts in getting your business up to speed with employees’ correct classification.

We know business owners already have a lot on their plate. This is why it is best to let experts help with tasks that can be outsourced. If you wish to know more about payroll outsourcing in Dubai or anywhere in UAE, call us here in Payroll Middle East!

Categories Payroll