Top three payroll mistakes to avoid

||

As a business owner, the importance of keeping a happy workforce cannot be underestimated. While a good working atmosphere and motivational techniques are vital, the best way to do this is to ensure that they feel financially rewarded for their efforts.

Sound payroll management is the key to making sure that employees are paid the right amount at the right time, but seemingly small errors can cause this to go awry. Such inaccuracies might lead to your staff becoming distrustful of you as a business owner, or their job satisfaction levels being otherwise knocked down a notch or two.

Here are three of the most common slipups:

1. Paying late or inaccurately

With day-to-day business tasks often leaving SME owners short of time, rushed running of payroll can lead to wages not being paid punctually. Perhaps even more insulting to staff than being paid late is being paid wrongly, whether it’s too little or too much.

Consider running a ‘dummy run’ of your payroll in good time for the due payment date. To be sure that you don’t miss paydays, ask your payroll provider to supply you with a list of dates on which payments should be made, if they haven’t already.

2. Using the wrong tax code

If one thing peeves employees more than being paid less than they should have, it’s being overpaid and told that they have to repay some of their wages from the previous tax year to HMRC. This happens to droves of employees every year though, usually as a result of an incorrect tax code.

To be on the safe side, most employers apply the BR (basic rate) code if there is any delay in obtaining the appropriate documentation from their staff. In most cases, this means that too much tax will be paid at first, but the employee will be rebated any amount they are due at a later date.

3. Not keeping records

Of a less immediate concern to your staff, but of equal importance, don’t forget that wage slips and P60 forms may be needed several years after they are issued, so you should always have archived payroll details available.

If you like to reward your staff with a bonus at Christmas or the end of the tax year, it’s fine to do this by cheque, but remember that this is tax deductible, so it should be included in your payroll.

By outsourcing accounts payable to a savvy company like Sollertia, business owners can rest assured that they will be keeping both their staff and HMRC happy with their payroll operations.