As an employer, you need to make sure that all your employees are receiving their weekly or monthly wages on time and most importantly, accurately. A mistake can take up valuable time to rectify and cause bad feelings for your team.
Also, any errors with PAYE submitted to the HMRC can generate a problem as well.
How do you reduce errors?
We manage payroll for many of our clients, so we know where mistakes can happen. Obviously, the easiest way to eliminate errors would be to outsource your payroll to a reputable company. But if you want to manage payroll yourself here are a few things to consider:
- If your employees have to clock in or record the time, they have worked, then make sure that the system you have is easy for them to use. By doing this, they are more likely to record their working time, and you will reduce errors.
- Overtime payments need to be accurately recorded and make sure employees are aware of the hourly rate for overtime worked. To reduce errors, look at digital methods for recording time as this reduces human error and keeps a log of all overtime worked.
- The main mistake that causes a lot of problems is having the wrong tax code. If an employee is paying the wrong amount of tax by error, this can result in penalties, having to pay back tax owing and interest charges.
- With auto-enrolment now in place, you need to make sure that you are set up to make pension contributions as agreed with your employee. Remember every three years you need to check with all employees that opted out initially if they want to opt back in.
If you pay your employee, the wrong amount or make incorrect deductions, you can find out how to rectify this mistake by looking at the HMRC website – Fixing problems with running payroll.
Managing payroll is a complicated task, and many small business owners outsource this to reduce errors. Outsourcing also helps if they don’t have the time to keep up with current legislation. If you would be interested in finding out more about our payroll service, please do get in touch.
You can call 01623 490 120 or email