5 Common Payroll Mistakes That You Need To Avoid In 2022

While paying your employees might seem a task that's super easy to do, the reality is that payroll is quite a challenge. One wrong move and your employees will be left unhappy. In fact, you can even get in trouble with the IRS if you don't do payroll properly, and with so many mistakes that can happen, this might just be the outcome if you aren't prepared.

So, to ensure you do not get into issues with your payroll, we want to share with you a couple of common payroll mistakes and how to avoid them:

Mistake 1. Paying The Wrong Amount

You would assume that a payroll mistake would be in underpaying an employee, but it can just as easily be overpaying an employee. You can't afford to pay employees more than they're supposed to be paid, but you also don't want to give them less than they deserve. It's always a good idea to double-check what you're paying your employees, especially if you have a new employee or if you notice something about their pay that seems off.

Mistake 2. Paying The Wrong People Themselves

This is another easy mistake to make because you think you're paying the right people, but you aren't. This could be anything, such as paying an employee and thinking you're paying a contractor, or paying an officer, and thinking you're paying an employee. Regardless, payroll mistakes are never okay and could land you in hot water, so make sure you pay the right people.

Mistake 3. Forgetting About Bank Holidays

This is a somewhat common mistake, which results in the payroll being sent too late. Bank holidays are something that most business owners do not want to think about, but they're quite common and easy to forget about. We recommend researching which bank holidays are coming up, so you can plan ahead and ensure that your payroll day doesn't end up on such a holiday.

Mistake 4. Ignoring Payroll Taxes

While we mentioned that ignorance of payroll taxes is not an excuse to ignore them, there are a lot of people who do not understand payroll taxes. This means that they don't know the tax rules, and they don't pay the right amount at all. So, make sure you understand your payroll taxes and that you're paying the right amount. Otherwise, you could end up paying for it later with additional consequences.

Mistake 5. Not Paying Employees Frequently Enough

This is another common mistake, which results in employees getting paid late, or even worse, not at all! Whatever you do, you should make sure you're paying employees on time. Otherwise, you could cause a lot of problems. Remember, payroll mistakes can lead to IRS penalties, so you should always be upfront and honest with your employees. If you can't make the time to pay your employees, they should be the first to know and the last to complain.

Conclusion

These are just a few common payroll mistakes, and there are plenty of others we haven't mentioned. The truth is that payroll mistakes can be more common than you think, especially if you're not paying close attention. Therefore, you should always remember to triple-check everything, so you're not making mistakes that lead to more trouble!

Totally Booked helps businesses by streamlining their financial side of things. If you are looking for payroll services in New York, reach out to us today!