payroll account

What Is Payroll Accounting?

What Is Payroll Accounting?

If you are running a business in Hong Kong, you need an effective accounting system. One of the hallmarks of a business accounting solution is payroll account.
With payroll accounting, you can ensure that every member of your team is paid properly and on time. Not only can you ensure that your team members are being paid the amount they are due each pay period, but a payroll accounting system or team will also make sure that your employee payments include the proper withholdings and deductions.
Read on to learn more about payroll accounting, and how the team of professionals at Fastlane can help your company boost its effectiveness and efficiency with high-level payroll accounting.

payroll accountWhat You Will Learn:

  • Why Should My Company Use Payroll Accounting?
  • What Are The Benefits Of Separating A Bank Account For Payroll?
  • What Do You Need To Set Up Employee Payroll Accounts?
  • Take Care Of All Your Payroll Accounting Needs With Fastlane
1. Why Should My Company Use Payroll Account?
When paying employees, it is essential that you have your information correct and your processes in order. 
With a robust payroll accounting system, you can handle all of your payroll needs in one location. This will likely include the payment of employees on a fixed schedule, as well as automation that will ensure the proper amounts are paid depending on the wage hours. 
Payroll accounting is also essential for helping withhold amounts for various employee benefits, as well as ensuring that the right amount of taxes are withheld for each team member.
2. What Are The Benefits Of Separating A Bank Account For Payroll?
To help ensure that all data is kept clean and clear, most companies will keep their employee payroll operating through a separate bank account.
This will allow for companies to ensure that the records for payroll accounts are located in one convenient location, and will help avoid potential overlaps of account payments or overdrafting on an account due to unexpected expenses.
3. What Do You Need To Set Up Employee Payroll Account?
When it comes to setting up payroll accounts for your staff and employees, there are several steps you must take.
Employee Information The first set of documentation you will need to set up an employee’s payroll account is their employee information. This can include their personal information as well as a set of verifiable personal identification. 
Most companies require their employees to fill out paperwork to give the company information regarding their person, as well as the amount of money they wish to have withheld for any tax or benefit considerations. It is advised that a company go over employee withholdings every year to ensure the right amount is being withheld.
Wage Information The next set of data you will need to set up an employee payroll account is the particular wage information for that employee. This will include the employee wage identification. Is the employee a full-time salaried employee, or are they part-time? Do they receive contractor or freelance compensation?
Knowing the employee’s wages and how they are identified in the payroll system will help ensure that they are paid properly. You can also make sure you are providing them any necessary statutory entitlements that amendments such as the 713 Ordinance require.
4. Take Care Of All Your Payroll Accounting Needs With FastLane
Are you looking for a payroll accounting solution that is tailored to your business’s unique needs? At Fastlane, our team of accounting professionals are experienced in helping HK businesses of all sizes ensure that their employees are set up with a robust payroll solution. 
FastlaneHR can help you develop a payroll solution that is designed to help your company automate payments and process the proper taxes and withholdings. With an all-in-one solution that is built to your company’s unique needs, you can trust that your payroll is set up for all employees.
Payroll Service Provider

How To Choose A Good Payroll Service Provider

How To Choose A Good Payroll Service Provider

If you want to free yourself up from having to manage payroll and all that the role entails, you should consider hiring the services of a payroll service provider. A high-quality payroll service provider will have the experience and expertise to help your business succeed with payroll – and a variety of other services.
In this article, we will break down the role of a payroll service provider, and how you can find the right provider for your business needs.   Payroll Service Provider

What You Will Learn:

  • What Is A Payroll Service Provider?
  • What Services Does A Payroll Service Provider Offer?
  • How To Choose The Right Payroll Service Provider For Your Needs
  • Trust Fastlane With Your Payroll Service Provider Needs
1. What Is A Payroll Service Provider?
In essence, a payroll service provider is a team or company that handles all of a business’s payroll process. These services can include the calculation of payroll for full-time, part-time, and contracted workers.
The services of a payroll service provider extend far beyond simply processing wages. Most providers offer services that include payroll tax statements, reporting for year-end taxes and much more. 
Payroll service providers can give business owners peace of mind as they trust that their employees are paid accurately and on time, and their tax considerations are well handled.
2. What Services Does A Payroll Service Provider Offer?
A true full-service payroll provider will help your company with a variety of financial services and processes. These services may include, but aren’t limited to:
  • Payroll calculations
  • Deposit & Withdrawal Services
  • Tax Withholding & Garnishment Payments
  • New Hire Reporting & Financial Processing
  • Time & Attendance Tracking
  • Benefits Reporting & Calculations
You will also want to ensure that your potential payroll service provider offers services that will help you manage tax preparation as related to full and part-time employees.
3. How To Choose The Right Payroll Service Provider For Your Needs
When it comes to choosing the right payroll service provider for your company, there are several considerations to take into mind:
Cost The first question that many business owners ask is “How much does a payroll service provider cost?” You will want to ensure that a payroll service provider fits into your company’s operating budget. 
You will likely find that a payroll service provider’s services will vary depending on the services they offer. However, when it comes to a provider that offers payroll services – and more – you can’t afford not to hire one!
Company-Specific Services Another consideration to take into account is how your business is structured. Do you have full-time and part-time employees? Are you in the business of hiring contractors or freelancers for various jobs?   Your payroll service provider should have the expertise to handle the unique circumstances of your business, and ensure that you are equipped to pay everyone accurately and on time.
Powerful Digital Services Another must-have of a payroll service provider is digital capabilities. This is even more essential if your company operates remotely or has team members in various parts of the globe.   Try to find a payroll service provider that uses digital cloud systems to handle your payroll services efficiently online. With most payroll service provider solutions, calculations are automatically made through sophisticated algorithms that note how much employees should be paid each pay period. These systems should account for elements such as shift differentials, holiday and overtime pay, taxes, and more.
Trust Fastlane With Your Payroll Service Provider Needs
Are you ready to take your payroll to a new level? Hiring a team of experienced and skilled payroll service providers can help your business function effectively and efficiently.
At FastlaneHR, we are proud to offer a suite of payroll services that will help your business keep the team happy with fast and accurate payroll services. Our team at Fastlane has the experience and expertise necessary to keep your payroll and other services moving smoothly. If you are looking for a high-quality payroll service provider that companies trust, contact Fastlane today.

What Is Hong Kong Salary Tax?

What Is Hong Kong Salary Tax?

When working in Hong Kong, it is vital to know the necessary taxes you must pay from your salary to avoid penalty. Read on to learn more about Hong Kong Salary Tax, and how to file properly.
For those working in Hong Kong, Salary Tax is the name given to the tax that individuals must pay each year on their income. Paying the accurate amount each year will help ensure that you are up to date with the IRD and avoid penalty. Ensuring that you understand Hong Kong Salary Tax will help you avoid unexpected costs and headache at tax assessment time.
In this article, we will break down the Hong Kong Salary Tax, the specifics of taxable salary and deductions available, and how to file properly.  

In This Article:

  • What Is Hong Kong Salary Tax?
  • What Is Taxable Under Hong Kong Salary Tax?
  • How Can I Calculate My Net Chargeable Income
  • What Is Deductible Under Hong Kong Salary Tax?
  • How Do I File My Salary Tax?
1. What Is Hong Kong Salary Tax?
The Hong Kong Salary Tax is the tax that is applied to individuals who work in Hong Kong and receive income from an employer. While many countries require a flat tax on the total combined income of an individual, Hong Kong features a progressive tax rate that is split between different types of income.
In short, those who take an income from work under a Hong Kong-based employer are taxed at rates that progressively grow depending on what is called Net Chargeable Income. The tax rate starts at 2% and grows progressively until it maxes out at 17%.
2. What Is Taxable Under Hong Kong Salary Tax?
Knowing the exact type of income that is taxable under Hong Kong Salary Tax can help both taxpayers and employers know what to expect each year. It is important to note that in Hong Kong there is no capital gains tax, dividend tax or inheritance tax.
To know what is taxable under Hong Kong Salary Tax, it is important to know your Net Chargeable Income. This income number combines the taxable income elements that you can expect to have to pay upon assessment. Not only are there a variety of income types that go into net chargeable income, but there are also potential deductions that can be taken as well.
3. How Can I Calculate My Net Chargeable Income?
So, what is included in a Net Chargeable Income, and how can taxpayers calculate this number to prepare for tax season? According to IRD law, Net Chargeable Income can be calculated with the following formula:

Net Chargeable Income = Income – Deductions – Allowances

In general, your income includes all general income that is received through an employer, as well as commissions, bonuses, and any allowances allowed by the employer.
4. What Is Deductible Under Hong Kong Salary Tax?
Fortunately, there are a variety of items that are deductible under Hong Kong Salary Tax that can quickly reduce the amount of Net Chargeable Income that can be taxed. Among those potential deductions are the following:
  • Outgoing payments and expenses (based on IRD-stated conditions)
  • Depreciation on plant equipment and machinery that was utilized to generate income
  • Any self-education expenses for furthering one’s career and knowledge
  • Charitable donations to a list of approved schemes and funds
  • Interest from a home loan based on qualifications
  • Elderly care expenses
While there are several potential deductions that can reduce net chargeable income, there are many qualifications and necessary approvals that must be reached. It is important to do the proper research on any deductions you think you are owed to ensure you can take them properly when filing.
5. How Do I File My Salary Tax?
It is vital that every taxpayer file their accurate tax returns each year with the Inland Revenue Department (IRD). Assessment for Hong Kong Salary Tax runs from April 1 to the end of March of the year after salary is earned. Tax returns are then sent out by May 1, and should be filed within one month from the day they are issued to taxpayers.
One important note to remember is that even if a taxpayer doesn’t bring in any income in the taxable period, they must still file with the IRD a “0” income earned on their tax form. Those who are married can request a joint assessment or a single assessment based on their circumstances. 
Business owners must file their returns within three months from the date that the return is issued from the IRD. Owners will then receive a “Notice of Assessment”, a notification of the amount that the company is liable to pay for Salary Tax.
FastLane HR is a dedicated Hong Kong based payroll and HR services specialist. Not only do we serve a broad spectrum of SMEs, we have obtained many years of experience in providing outsourced services for both local and foreign organisations.  We ensure that every aspect of your business complies with current regulations and ordinances. Please contact us for enquiries!  
713 Ordinance

What Is The 713 Ordinance In Hong Kong?

What Is The 713 Ordinance In Hong Kong?

Implemented on July 13, 2007, the Employment (Amendment) Ordinance is a set of legal guidelines that determine a specific employee’s statutory entitlements in Hong Kong. The name 713 Ordinance comes from the date the ordinance came into effect – July 13, 2007. The ordinance covers eight key statutory entitlements for employees that ensure they are compensated properly for their work across a variety of circumstances.
In this article, we will break down the 713 Ordinance, and how you can ensure that your Hong Kong company stays compliant with the help of a professional team.  

713 OrdinanceWhat You Will Learn:

  • What Are The 8 Key Statutory Entitlements?
  • How To Calculate 12-Month Average Wage
  • Are There Exceptions To 713 Ordinance Wages?
  • What Are The Penalties Of Not Holding To The 713 Ordinance?
  • Stay Compliant With The 713 Ordinance With Fastlane
1. What Are The 8 Key Statutory Entitlements?
The 713 Ordinance ensure that Hong Kong employees receive eight key statutory entitlements:
  • Holiday pay
  • Annual leave pay
  • Sickness allowance
  • Maternity leave pay
  • Paternity leave pay
  • End of year payment
  • Payment in lieu of notice
  • Amounts for non-compliance with an order of reinstatement due to unreasonable and unlawful dismissal
The amounts due to employees based on these statutory entitlements can vary depending on one’s wages. With various employees making different wages, it can be easy to find yourself with incorrect statutory entitlement calculations for employees. 
2. How To Calculate 12-Month Average Wage?
To ensure that your HK business is following the 713 Ordinance entitlements, it is important to properly calculate your employee’s 12-month average wage. The Average Daily Wage (ADW) can then be used to calculate statutory entitlements.
To calculate ADW:
((Total wages earned in a 12-month period) – (Total earnings for days with less than full wages))

_________________________________________________________________

 (Days in the 12-month period) – (Days with less than full wage)
By calculating this amount for every employee, and then taking into account the eight statutory entitlements for each, you can ensure that you are paying and providing for each employee in such a way that you are compliant with the 713 Ordinance.
3. Are There Exceptions To 713 Ordinance Wages?
There are exceptions to what can be considered wages – and therefore fall under 713 Ordinance entitlement:
  • Retirement scheme contributions
  • Discretionary bonuses
  • Directly reimbursable travel expenses
  • Employer-provided accommodation, education, food, or medical care
4. What Are The Penalties Of Not Holding To The 713 Ordinance?
Hong Kong companies that do not follow the guidelines set forth in the 713 Ordinance can face legal scrutiny, public embarrassment, and potential litigation.
Stay Compliant With The 713 Ordinance With Fastlane
The process of staying compliant with the 713 Ordinance is incredibly important for Hong Kong companies. While the calculations can be relatively simple, ensuring that all aspects of your business are following the ordinance properly can be exhaustive.
The key to ensuring that your company is following the 713 Ordinance and staying legally compliant is to partner with a financial expert. At Fastlane, our team of Hong Kong financial experts are experienced at helping companies follow employee statutory guidelines for pay. 
The solutions provided by Fastlane can help your business automate your payment systems to stay compliant with the 713 Ordinance. By helping your employees maintain proper protections under the eight statutory entitlements can save you time, money, and growth potential.
FastLane HR can also ensure that your HK company is EAO compliant – helping you upgrade your systems to provide accurate pay and withholdings for employees. With Fastlane, you can ensure that your employees are protected and paid properly – and ensure that your business avoids costly penalties and damage to your reputation.
To learn more about Fastlane’s 713 Ordinance compliance services – and host of other HK business services – contact our team today.

6 Tips to Reduce Staff Turnover

6 Tips to Reduce Staff Turnover

Every time an employee quits, it costs their employers time, money and can potentially unsettle your team morale. In consequence, it is more important than ever to look at how to properly manage one’s staff to reduce staff turnover within a company.
If you’re unable to retain staff due to them wanting to retire or move to a new city, then there’s not much that you can really do about that. However, you can retain staff who are feeling undervalued, underpaid, or those who see no progression within your organization.
In this article, we will explain what exactly staff turnover is, why staff turnover happens, and provide some tips on how Hong Kong employers can reduce staff turnover.  

What You Will Learn:

  • What is Staff Turnover
  • Why Does Staff Turnover Happen
  • 6 Ways to Reduce Staff Turnover Rates
1. What Is Staff Turnover?
Staff turnover, or also known as the employee turnover rate, is usually defined as the measurement of staff who leave a business during a specific time period. Typically, the results take into account one whole business year.
2. Why Does Staff Turnover Happen?
There are many reasons why employees of a company may choose to leave. However, below are some of the most common reasons for why staff turnover does happen:
  • Lack of training, support, or resources necessary for employees to complete their job responsibilities
  • Poor management from their supervisors
  • Unable to fit in with the business culture
  • Lack of career advancement opportunities
  • Feeling overworked/burnout
  • Toxic work environment
  • Receiving a competitive offer from another company
  • Lack of work-life balance
Understanding the causes of employee turnover can help employers implement the necessary changes to reduce staff turnover and maintain a strong roster of staff. However, simply understanding these causes may not always be enough – in many instances staff turnover can be reduced through taking action!
3. 6 Ways to Reduce Staff Turnover Rates
To Retain Staff, You Must Encourage Ideas
Reduce staff turnover by creating a workspace environment in which your employees feel that their employer appreciates both their ideas and their perspectives.  Employers should encourage their staff to present new and innovative ideas, and of course, regularly asking for staff input is a big part of that. However, one should always remember that even bad ideas should be met with respect. You’ll find that by simply listening, you’ll lower your employee turnover rate by making sure that everybody feels valued and respected.
Show You Care Through Supporting Development
Personal development is key when it comes to lowering employee turnover. When you show your staff that you care about their path inside (or even outside) your company, you’ll be able to promote feelings of empowerment within. To retain staff, ensure that you show support, contribute to aspirations, and make them feel valued at all times.
Promote From Within
When you choose to promote from within, it really shows your employees that all of their efforts do matter. Imagine you’re in a position where you’ve been working months for a promotion, just for your boss to tell you that the very position you were aiming towards has been filled by an outsider? How disheartened would you feel? Make sure that you’re always leading by example, and encourage staff retainment by showing everyone that hard work really does pay off.
Avoid Micromanagement, Allow Freedom
Some of your most valuable staff will exceed in tasks given to them thanks to their skills, creativity, and communication. That’s how they thrive best, and that’s why it’s essential to give them as much creative freedom as possible. Give them the power to be themselves and pursue new ideas alone. In order to succeed in reducing staff turnover, micromanagement needs to become a thing of the past.
Pay What They’re Worth
What’s it worth to your company when it comes to retaining staff that add value? Obviously, they’re making you money, if they weren’t then you wouldn’t be so worried that they might leave. So, why wouldn’t you pay them what they’re worth? After all, if you don’t, somebody else will.
Make Their Lives Easier
While the primary responsibilities of employees is to manage their job responsibilities, they are also responsible for ensuring that they follow their employer’s internal HR procedures! Aspects such as claiming varying types of leave, filing expense claims and reporting their salary tax obligations are also expected of staff. However, sometimes managing these responsibilities can be tedious, especially after a full day of work.
Employers should consider reaching out to a professional HR advisor who has experience with various cloud-based HR / payroll solutions – business tools that can make the lives of employees easier when managing these responsibilities.
HR advisors often utilize such business tools as they offer a diverse range of benefits not commonly found in traditional payroll systems. Very simply put, these tools provide increased efficiency, improved financial control and allows staff to spend more time on business driving activities. For example, platforms such as Workstem are catered to local Hong Kong companies and allow their users to manage their staff in accordance with all of Hong Kong’s local legislation!
How Fastlane Can Help
Let’s face it, valuable employees don’t grow on trees. Businesses around the world spend a lot of time and money when it comes to finding the right people for the job. Learning the strategies required to reduce staff turnover has always, and will always, continue to be a necessity.
The FastLane Group are professional HR advisors. Not only can we help employers improve their internal HR processes, but our knowledge of Hong Kong’s Employment Ordinance means that we have the expertise to help you manage your statutory obligations as a Hong Kong employer. We are also a dedicated Hong Kong based payroll and HR services specialist and serve a broad spectrum of SMEs which includes both local and foreign organisations.  We ensure that every aspect of your business complies with current regulations and ordinances. Please contact us for enquiries!