Payroll is a tedious process of running a business, but one that cannot be avoided. If you are running a business that hires employees, payroll is something that you can’t run away from. All too often, what should be an easy task ends up becoming a stressful experience due to problems that business owners may face when paying staff. In today’s article, we have a look at some of these common problems and how you can overcome them in order to make your payroll process as smooth as possible. Read on to find out more!
Miscalculations and Poor Record Keeping
Ensuring that you have calculated payments and kept accurate records with regards to payslips can sometimes become an incredibly stressful and confusing task. This is especially apparent in businesses that hire a large amount of staff. As we know, errors in payslips can result in disgruntled employees, which is why eliminating miscalculations is of utmost importance. One of the best ways you can do this as a business owner is to utilise a payslip template. A payslip template is a simple way to handle all your payslips at once and avoid miscalculations. Payslip templates come with built in formulas so that you don’t need to stress about getting your sums wrong. A template also allows you to replicate payslips, meaning you only need to enter employee particulars once, saving you a lot of time in the long run.
Missing your payslip deadlines is a fantastic way to ensure that your employees are dissatisfied and unhappy. As we know, unhappy employees indivertibly reduce business growth which is why ensuring that your staff is paid on time is imperative. Another downside of missing payment deadlines is that it may land you in hot water with the tax office. Late deposits may result in interest charges or penalties, making timely payments all that more important. We recommend that business owners always mark their calendar and set reminders to ensure that payments are always made on time. You can use an online tool to send you reminders, or simply switch to an automated payroll system that will do the job for you.
Classifying Workers Improperly
Another common error with regards to paying staff is wrongly classifying workers. Some of your workers may be freelancers, independent contractors or just regular employees. Mixing this up can result in costly mistakes that are detrimental to your business. For example, contract workers don’t get paid overtime wages and classifying a regular employee as a contract worker is going to result in them missing out on wages. If you do end up misclassifying a worker, you are then responsible for paying their share of taxes plus any penalties incurred. In order to avoid this, it is so important that you ensure that you are classifying your workers properly. Utilising payroll software is a fantastic way to ensure that you never confuse one worker for another or make a pricey mistake.
Miscalculation of Overtime Wages
Another incredibly common mistake is the miscalculation of overtime wages. If you have a large workforce, keeping track of who is doing what and how many hours of overtime is owed can be a very tedious process. If you pay too much overtime by accident, you’ll be losing money. If you don’t pay what is owed, your business will land in hot water. The best way to avoid this is to utilise a payroll software and employee scheduling software where you can keep track of overtime hours and ensure that the correct wages are paid on time.
Correct Leave Entitlement Rates
Last but not least, calculating the correct leave entitlement rates for your employees can be an incredibly arduous task. Generally, most businesses offer 4 weeks of paid annual leave per year and up to 2 weeks of paid personal leave annually. Calculating these rates for multiple employees can be a stressful and time consuming process which is why we always recommend automating the payroll process. Not only will you ensure 100% accuracy, you can also rest easy knowing that leave entitlement rates will be easily settled without you ever having to lift a finger.
Payroll can come with a myriad of problems, but it doesn’t have to. By utilising a variety of tools, software and automation, you can ensure that you eliminate common problems that business owners face when paying staff.