Payroll Problems You Shouldn’t Ignore
Payroll Pitfalls: Most Common Mistakes
Miscalculating pay is one of the most common payroll errors. This can happen when payroll administrators fail to account for overtime, shift premiums, and time off when calculating an employee’s salary. Such errors can lead to underpayment, legal challenges, and employee dissatisfaction. Overpayment can also occur when payroll administrators need to track hours worked or remove dismissed personnel from the payroll system.
Incorrect employee information, such as National Insurance numbers and addresses, can lead to payroll errors. This can cause incorrect tax calculations and potential legal issues. Therefore, payroll administrators must verify employee information before processing payroll.
Non-compliance with payroll laws and regulations, including the General Data Protection Regulation (GDPR), can result in fines and legal action. Therefore, businesses must ensure that they comply with payroll laws and regulations and that employee data is protected.
An estimated 82 million UK employees are affected by payroll problems, with about a quarter of all workers dealing with pay-check errors. The HMRC has estimated that around one-third of employers make a payroll mistake in any given year, collecting nearly GBP 7 billion in penalties for 2021.
Smooth Sailing: Solution to Payroll Problem
Businesses should also ensure they are up-to-date with changing payroll laws and tax regulations. Accuracy is vital in payroll, and businesses should double-check all employee information, tax withholding amounts, and payment information. Inaccurate reports can lead to penalties from HMRC, and businesses should take reasonable care to get things right. Penalties for errors due to failure to take reasonable care can be reduced to zero with full and unprompted disclosure to HMRC.
By opting for managed services like PCL’s Global payroll solution, one can ensure compliance with payroll laws and regulations, businesses can avoid costly mistakes and ensure employee satisfaction. In addition, accurate and timely payroll processing can increase productivity and improve employee morale, ultimately contributing to business success.
Hence, by taking reasonable care to get things right, correcting errors as soon as possible, and making full and unprompted disclosure to HMRC can also help reduce penalties. By implementing these solutions and ensuring compliance with payroll laws and regulations, businesses can avoid costly mistakes and ensure accurate and timely payroll processing, ultimately contributing to business success.
BGC Partners overcame payroll issues with an integrated, end-to-end Oracle Cloud HCM resulting in significant time savings, allowing focus on strategic initiatives.
The Riverside Group is one of the UK’s leading registered social housing providers, with over 3500 employees and over 75,000 homes