Although human error used to be a necessary part of the payroll process, new payroll technology allows you to sit back and relax with minimal adjustments. However, it’s crucial to keep an eye out for these common payroll mistakes and adjust when necessary. If payroll errors are made, you risk costing your business revenue and a breach of private employee information. Follow these steps to help eliminate payroll errors for good.
Classify employees correctly
Misclassifying full-time employees as independent contractors is a serious problem that can cost your organization significant time and money. It’s considered a violation of the Fair Labor Standard Act when an employee is misclassified or a non-exempt salary staff employee is denied overtime.
W-2 employees need the proper social security and Medicare taxes withheld from their paychecks, which completely falls on the employer. To avoid potential problems for your business, be sure to check out the U.S. Department of Labor’s classification guidelines, state and city rules, and IRS rules.
Deposit employee taxes on time
Whether you manually or automatically submit employee taxes, you’re required to deposit all employment taxes on either a monthly or bi-weekly schedule. Stay on top of depositing employee taxes because up to 15% of taxes are owed for unpaid deposits more than 10 days after the first notice.
Most organizations hire different types of workforces including full-time, part-time, contractor and more. Although it may be chaotic to fill taxes based on different work schedules, be sure to always make it your priority.
Pay out all overtime
Many employers work toward not scheduling overtime unless necessary, but it’s important to accurately document overtime when it does happen — even if it’s an extra few hours here and there. There’s no cap on overtime pay, and you’re legally required to pay a non-exempt employee no less than time and one-half their regular rate of pay, according to the U.S. Department of Labor. If you fail to do so, you’ll owe 100% of overtime to the employee and also up to $1,000 per violation.
If you need help executing any of this, it’s smart to turn to advanced payroll software that helps streamline payroll processes. Payroll Office of America creates customized solutions that effectively automate payroll and increased employee autonomy with a self-service portal. To learn more about Payroll Office of America and the fabulous services they offer, click here or call 904-596-2847. Good luck! You’ve got this and you have experts to help you along the way.
