In the recent past, the corporate world has experienced a consistent surge of payroll solutions online. Hence, this makes it very easy for many businesses to harness the power of web-based payroll software to perform payroll procedures well. However, as an employer, you may still make mistakes even with the best technology in place.
Regardless of your industry, company and employee size, there are some pertinent steps you must take to avoid potential payroll mistakes. This is essential to ensure that your payroll administration has a perfect record of being 100% percent accurate every time. Here are the three most overlooked payroll mistakes that have brought trouble to many small businesses in the past:
Lack of a new hire checklist
It is common knowledge that there are a lot of things to consider when you need to get a new employee onboard to join your company. If you do not have a new hire checklist that is complete with payroll considerations, you are making a big mistake. This checklist is an essential tool to create the roadmap for a smooth transition, and they have to include your company’s mission, equipment, employee policies, dress code, codes of conduct, vacation rules and more.
Is the person an independent contractor or employee?
It is very important that you determine if the new worker in your company is a standard employee or independent contractor. You may want to reconsider if you think this is not important. The Internal Revenue Service has a set of rules to determine if a worker is an employee or contractor and this will impact how the person should be paid. If you make a mistake of classifying a worker wrongly and the IRS uncovers that mistake, that mistake will lead to more compliance headaches and legal troubles.
Not running employees’ bonuses through your payroll
This is a common mistake that happens during the holiday season when businesses pay their employees a Christmas bonus. Although there is nothing wrong with rewarding a worker with extra money, the provision of bonuses has to run through the payroll, just like the other ordinary wages.
Other payroll mistakes that you should know
These are some of the easy payroll mistakes to point out, and there are others that lurk in the shadows and may surface at the worst time. Other major payroll mistakes may include not recording the paper checks you give to your employees, not saving payroll records, missing deadlines, not running payroll on time and even setting up the payroll system incorrectly from the start.
Online payroll solutions can make managing your company’s payroll matters feel like a walk in the park and at TRAXPayroll, we have the resources and expertise to help you complete all your payroll paperwork accurately. Our services automatically keep track of changing tax obligations and legislation, so you are able to meet filing deadlines without any difficulty. Additionally, your employees will gain access to premium self-help tools such as online reporting portals to keep track of their pay matters. If you feel your company can benefit from online payroll services, don’t hesitate to contact us today!