When a company chooses not to set up a payroll outsourcing system and keeps it in house, not very many consider the potential problems that could arise from one non-intentional mistake. Some of the problems could be the loss of trust from a valuable employee who will choose to leave causing loss of talent. Even more importantly, payroll mistakes can result in massive fines, penalties and payback amounts to the tax to the IRS. Here are the five most common payroll mistakes that you should be aware off and try to avoid.
Incorrect payroll set-up
This is one of the most common problems that can go unnoticed. Even if you are entering all the information correctly and making sure that all employees are paid their dues on time, a little mistake in the registration of the company or an error in the number under which the employee is registered can make the difference between a clear and perfectly legal payroll outsourcing and huge fines and fees.
Not recording a cheque
Any payments made to an employee need to be recorded accurately and on time. Not recording that can cause a hole in the balance and a bigger problem in tax returns. Many owners especially in small companies tend to give cheques quickly by hand sometimes, especially for bonuses and reimbursements. The problems arise whenever those cheques are forgotten and not recorded.
Not fully knowing the tax rules
Once you have paid your taxes and deducted those funds from your employees. You need to wait to receive your tax returns and from the government, you will need to deposit it and make sure that it is processed on time. Depending on your tax liabilities, these rules can vary and you should follow them in order to avoid any further problems. Make sure you know those rules and save yourself and the IRS staff a visit.
Remember that you need to keep all the deduction and unemployment insurance up-to-date and those do tend to change often. Failing to update those regularly as they change can result in underpayment and hence cause you problems, penalties and fees. If you find that those problems are recurring you should consider payroll outsourcing as an option. Check here!
Not running your payroll on time
Many small companies are rushing to keep everything in order either because of a lack of resources or because of too much work and it does happen on occasions not to run their payroll on time or forgetting about it completely.
Many small companies have problems because of payroll fraud. Such problems can be a huge financial drain especially on small businesses who are struggling to start up. Those mistakes are easily avoidable and can save the business by keeping the good employees around. It can also save the company much needed money that can be invested in expanding the business. If these problems continue to occur, you may want to consider looking into one of the many payroll services Australia has to take over that for you and save you all this trouble. Check this: https://payrollserviceaustralia.com.au, if you want to know more about payroll putsourcing.