10 common payroll mistakes to avoid

Antonella Gasparro, Senior HR Manager at VISTIM tells us about the 10 common payroll mistakes to avoid:

 

  1. Missing paydays: running payroll too late leads to unhappy employees. Make sure to mark your calendar with the right timeframes in order to meet the important dates and deadlines; if you are using external vendors ensure you agree a quarterly or semi-annual payroll planning with them that gives you sufficient time for review of their work and potential corrections;

 

  1. Rush through payroll processing: do not underestimate the workload during payroll process. You must be prepared to face any unexpected situation;

 

  1. Communication channels not efficient: payroll department must be able to exchange information with other HR colleagues or other parts of a business, and its employees. By failing to build this collaboration, the payroll process is forced to slow down for critical information updates and errors take longer to address and fix;

 

  1. Bad records filing: payroll records must be kept in a meticulous and accurate manner and must contain all small details (requests, approvals, clear figures) at every stage of the process. Remember payroll is audited so investigation must be made easy;

 

  1. Missing tax deadlines: follow submission guidelines to tax authorities and get your payments out on time; this requires to declare and pay the tax that has been deducted from the salaries paid to employees within 10 days of the end of the declaration period.

 

  1. Four eyes principle not applied: it is best practice to approve the monthly payroll process by two separate individuals especially if it’s not outsourced to an external provider.  The payroll activity should therefore be double-checked and approved by another competent colleague or by the HRD;

 

  1. Not having adequate backup: should the payroll officer be away or sick and miss critical payroll deadline, employees won’t get paid on time. There needs to be more than one person capable of both understanding and handling the payroll functions. Ensure the payroll procedure is always up to date to facilitate the backup work ;

 

  1. Not staying up to date with the rules and regulations impacting payroll: it is important to be informed of regulatory and administrative changes and maintain compliance. To do so subscribe to professional newsletters, contact the relevant authorities and/or undertake relevant training courses;

 

  1. Not maintaining confidentiality: Payroll information should not be disclosed to anyone outside of the payroll/HR department. It is important that such confidentiality is maintained and that payroll is handled in a secure environment;

 

  1. Human errors: errors are an inevitable part of the process. That being the case, once an error has been recognised, understanding the correct procedure for dealing with it and trying not to repeat the same error in the future is vital.