Understanding and Preventing Common Payroll Errors

Any business, small or large, needs to have a system in place for handling payroll activities. It’s important to set your business up with the right procedures and protocols to stay on top of managing payroll. If not managed properly, payroll can cost both the business and the employee time and money.

Understanding and Preventing Common Payroll Errors

Unfortunately, mistakes are common, even in payroll. We’re here to assess the most common errors and assure you that Workforce Payhub is the right management system for you.

Missing Deadlines

One common payroll mistake is missing deadlines. There is reporting that occurs throughout the year to record and deposit payroll taxes to federal and state agencies. If these dates are missed, your business could encounter penalties and interest charges. It’s important to mark your calendar and stay on top of important dates and deadlines.

Misclassification of Employees

Another common payroll error is misclassifying employees. For example, incorrectly registering an employee as an independent contractor if they are not. If you misclassify an employee, this will result in a significant problem because the company will take a hit. Meaning you will have to pay not only the employee’s share of taxes, but the employer’s share as well – plus penalties and interest.

Not Tracking Employee Hours and Overtime

Not tracking employee hours and overtime is another thing that could result in payroll errors. If overtime hours are incorrectly logged, this can lead to overtime payments, which then leads to correction potentially across multiple tax years. This is always a bit tricky because calculating overtime may differ from employee to employee. However, staying organized and efficient will help your business succeed. Make sure you’re up to speed on local laws regarding overtime wage guidelines and carefully monitor your employee’s work time. Using time and attendance software like the one Workforce PayHub offers helps track time very easily.

Inconsistency with Payroll

Another common payroll error is inconsistency with payroll. For example, being late or not having a schedule in place for payday. While business can be tough and unpredictable, an employee’s paycheck should never be late. Having a predetermined pay period set in stone helps create trust for your employees and makes them feel valued.

Importance of HR Management Solutions

While the list, unfortunately, does go on, these are some of the most common mistakes that can happen. Having an HR management solution in place will help make your life easier.

Workforce PayHub has everything you need to stay organized, properly manage your employees, and overall run your business seamlessly every day. By working with Workforce PayHub, you won’t have to worry about these common errors you’ve just read about. While we are all human and mistakes happen, we are here to make your life easier.

Eric Jones
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