5 Common Payroll Mistakes to Avoid

5 Common Payroll Mistakes to Avoid

Mistakes happen to the best of us. But when they happen on an employee’s paycheck or with a tax payment, they can be very frustrating. It’s important to have a solid payroll processing and tax compliance plan in place to avoid potential payroll errors and fees. Here are the five common mistakes to avoid:

1. Not staying current on new payroll law, rules, and regulations

Payroll laws and regulations are an everchanging landscape. It’s important to be aware of new laws that are passed to ensure your company is maintaining compliance.  When you miss a new law, you stand to lose invaluable time trying to amend any payments you have made using the previous law or rule. You can ensure compliance by creating a calendar that reminds you to check for updates to all relevant laws.

2. Failure to commit to a consistent payment schedule

Whether your company is new or well established, it’s important to be consistent with your payment schedule. The most common schedules are either weekly or biweekly, but some companies choose to pay their employees semi-monthly or monthly.

3. Lack of solid planning

Having a solid plan in place for managing your company’s payroll is key to ensuring everyone is paid on time and avoiding potential errors and fees. It’s important to keep track of things like holidays that fall on paydays and issuing W-2s and 1099s.

4. Miscalculating net versus gross payroll

One of the more complex aspects of a payroll managers duties is calculating payroll taxes. To avoid paying unncessary fees to the IRS, it’s crucial to work out this calculation accurately.

5. Ignoring or missing a garnishment request

As soon as you receive a garnishment order, place a copy in the employee’s file and add it to you calendar to ensure you make the appropriate deductions from each payment.

Mistakes happen, but with the right tools in place, you can sharpen your payroll management skills and improve your company’s bottom line. Learn more about how to avoid common payroll mistakes.