HR and Payroll Audit

Scope of the HR and Payroll Audit at PKF

The Audit primarily covers the review of personnel files and the analysis of payroll accuracy. The service includes:

Verification of the accuracy and completeness of employee records, including medical exam dates and health and safety training, based on the Polish HR and payroll system.
Verification of the correctness of salary and/or benefit calculations.
Audit of HR and payroll documents and review of settlements with ZUS and US.
Additional audit tasks, including the review of work regulations, remuneration policies, and remote work policies.
Preparation of a report on the conducted audit.

We tailor the cooperation model to the company's needs. The Audit can be conducted on a sample of employees agreed upon with the client and for a period adjusted to the company's needs. It can cover the entire scope or a selected area of the HR and Payroll Audit.

What is the HR and Payroll Audit Service at PKF?

An HR and payroll audit is a detailed analysis and assessment of systems, processes, and documentation related to human resource management and payroll processes within an organization. Its main goal is to verify that HR and payroll practices comply with labor laws, tax regulations, social security obligations, and other local and internal regulations.

Key Areas of the HR and Payroll Audit

Legal Compliance: Ensuring the company adheres to local labor laws, social security regulations, tax obligations, and other legal requirements. This includes checking employment contracts, personnel documentation, payroll policies, and related calculations.
Process Efficiency: Analyzing HR and payroll processes to identify potential inefficiencies or errors that could lead to financial losses or legal issues. This includes examining procedures related to payroll calculations, time management, leave management, and employee records.
Risk Assessment: Identifying areas that may pose risks to the company, such as inaccuracies in documentation, errors in social security contributions, and potential risks related to tax or labor inspections.
Recommendations and Corrections: Providing recommendations on how to improve existing processes and suggesting corrective actions to minimize risks and enhance the company's operational efficiency.
Equity and Inclusion: Ensuring that all HR and payroll processes are conducted fairly and equitably for all employees, in line with the company’s internal policies and best practices.

HR and Payroll Audit is the management tool that not only helps minimize the risk of legal consequences due to non-compliance with regulations, but also improves the overall efficiency of the HR department, contributing to better human resource management.

When to Conduct HR and Payroll Audit?

Conducting HR and Payroll Audit is recommended for various types of companies depending on their situation.

Rapidly growing companies
Companies experiencing rapid growth and increasing employment often face challenges in managing a larger workforce. An audit helps ensure that all processes are scalable and keeping pace with the company’s growth.

Companies undergoing restructuring
During organizational changes such as mergers, acquisitions, or reorganizations, an audit ensures that all HR processes are integrated, compliant, and efficient.

Companies after external controls
If a company has previously encountered issues during inspections (e.g., labor or tax office inspections), an internal audit can help identify and eliminate weaknesses, reducing the risk of future problems.

Companies implementing new IT systems
When implementing new IT systems for HR and payroll management, an audit ensures that all processes have been correctly implemented and that the system functions as expected.

International companies
Companies operating in different jurisdictions may face challenges due to variations in labor laws. An audit ensures that operations in Poland comply with local regulations.

Companies with high employee turnover
In companies with a high turnover rate, an HR and payroll audit can help identify the causes of turnover and suggest strategies to reduce it.

Before changes in Labor Law
When significant changes in employment regulations are forthcoming, an audit helps assess the company’s readiness for their implementation and prepare adequately for the changes.

Preparing for certification or external audits
An internal audit can be conducted to prepare the company for external audits or certifications, such as ISO, which may be required by some clients or industry standards.

Conducting HR and Payroll Audit in these and many other situations not only increases confidence that the company operates in compliance with applicable laws, but also enhances its image as a responsible employer and a reliable business partner.

Main Benefits of Conducting an HR and Payroll Audit

Compliance with legal regulations
Ensures the company adheres to current labor, tax, insurance, and other local regulations, reducing the risk of financial penalties, legal proceedings, and reputational damage.

Risk identification and reduction
Helps detect potential issues and irregularities in HR and payroll processes, allowing early resolution before they become serious problems.

Process optimization
Analyzing and potentially improving HR and payroll processes can increase their efficiency and reduce operational costs. This may involve process automation and the elimination of unnecessary steps.

Improved data accuracy
Ensures all HR and payroll data is accurate and up-to-date, which is crucial for effective human resource management and avoiding payroll or settlement errors.

Better HR management
Identifying weaknesses in HR and payroll policies and regulations allows for their improvement, leading to increased employee satisfaction and motivation, as well as better talent management.

Preparation for future legal changes
Helps the company prepare for upcoming legislative changes, ensuring enough time for adaptation and implementation without rush and chaos.

Strengthening trust and credibility
Transparency and compliance with regulations improve the company’s image among employees, business partners, and regulators. Companies that regularly conduct audits are seen as more stable and trustworthy.

Support in decision making
Accurate and verified information on labor costs and other HR and payroll aspects can be crucial for the company’s business strategy, enabling better planning and budget management.

These benefits indicate that an HR and payroll audit is an essential tool for any company, regardless of its size or industry, striving to optimize its operations, improve human resource management, and minimize legal and financial risks.

Interested in learning more about collaboration opportunities with us? Contact us!