5 Common Payroll Mistakes To Avoid
1. Failing To Automate Payroll Procedures
When it comes to payroll, less automation means being more susceptible to payroll errors. Safeguard your company from payroll tax violations and salary errors (and save yourself hours of inputting information) with automated payroll software from Alliance Resource Services.
In today’s fast-paced and modern world, manually inputting onboarding information and calculating payroll, not only requires hours of manpower, but it’s also less reliable than using an advanced software platform. While some still fear automated oversights or miscalculations, automated payroll platforms have proven to be more reliable and accurate than manual input from the most seasoned accountants.
Not only do automated payroll platforms save you hours of precious time and from making small errors that could result in massive headaches, they also provide simplicity and convenience for your employees.
Whether it’s a small business or large corporation, modern employees expect easily accessible payroll and onboarding information via online platforms; platforms where they can update their personal information and view pay history. Moving payroll and onboarding procedures toward online, automated systems, will make your life easy-breezy and keep your employees happy.
2. Not Keeping Up With Tax Changes
An automated system can also help make your payroll compliant with the latest changes to the tax code. If you’re left without such a system and are unaware of changes that affect your payroll, you may find your company being audited.
Being financially audited by the IRS or compliance audited by the state Business Bureau, is rarely a fun process. Such will require hours of your time and may result in heavy fines from tax or compliance violations you or your company were simply unaware of.
Relying on manual payroll and onboarding processes leaves significant room for error as well as overlooking recently updated tax codes, state codes, and federal codes. Automated systems, however, will update with and ensure you are aware of this new information, providing you with a sound business and peace of mind.
3. Filing Payroll Taxes Too Late
It can be overwhelming to know when to file payroll taxes and reports on the local, state, and federal levels. If you keep missing important payroll deadlines, it may be time to reevaluate your system.
A reliable payroll and onboarding systems provider like Alliance Resource Services, can help to ensure that important payroll, tax, and report deadlines are being consistently met. Missing such deadlines can have an array of negative effects on your company’s financial state and may also result in an audit and/or fines.
Your employees expect on-time payroll tax submission as well. Filing too late can create a ripple effect that negatively affects everyone. Luckily, with online payroll and onboarding software systems, you won’t need to remember important dates amongst your laundry list of business items; automated systems will repeatedly remind you about upcoming tax and report dates, and verify that such have been submitted on-time.
4. Miscategorizing Employees and Independent Contractors
Whether a worker is an employee or an independent contractor, will play a major role in payroll processing. Yet, many business owners still don’t understand the difference between the two and it ends up costing them.
An employee, versus an independent contractor, refers to their employer’s ability to withhold taxes. Pay may be the same amount, but with an employee, the company withholds income tax, Social Security tax, and Medicare taxes from their wages.
An independent contractor is allowed to claim their employer for tax identification purposes, but the employer does not withhold taxes and therefore cannot offer any benefits. Employment and labor laws also do not apply to independent contractors who often provide their own supplies for temporary work.
The IRS uses a right-to-control test to assess a business’ tax liability. Each state also has tests to determine workers’ compensation and unemployment insurance laws. If you are unaware of or in violation of such employment laws, you may be liable to lawsuits, audits, and fines. Digital payroll and onboarding systems can help you determine how to categorize workers and ensure all laws are being accounted for and met.
5. Other Compliance Issues
The list of payroll compliance issues that small business owners can face, goes on and on. From not adhering to state laws on overtime wages, to breaking pay period regulations. You may find it hard to make your payroll completely compliant without professional payroll and onboarding assistance.
A reliable payroll and onboarding systems provider like Alliance Resource Services, can help you avoid making these common and often costly mistakes. Don’t leave yourself or your business to chance by risking errors, lost time, audits, code violations, lawsuits, and their consequent headaches. Secure peace of mind, compliance, and total solvency with online, automated payroll and onboarding resources.