Payroll errors are more than just a mild annoyance. They can lead to the government (internal revenue service) becoming aware of your business operations and issuing you a letter stating they were required to send you an audit notice. A few simple mistakes could wind up costing your company thousands in fines and take precious time away from doing what you are supposed to be doing.
Payroll Errors and How to Avoid Them
Make sure that you keep your payroll records in a safe place. Payroll data should not be kept in an open and unsecured location. What’s worse is if you have a stolen laptop, the thief will access all of your business’s payroll information data.
2. Another error many people make is using the wrong social security number for the employee. Many people keep using the same SSN for many employees because they think it will save them money when they are filing taxes, but it actually can cost you a lot of money by opening up paystubs to identity theft and having to deal with it on a company level due to new regulations that were passed late last year.
3. Another common error is to vary your payroll day by day. Your pay periods must be consistent throughout the year, so you can accurately track and file taxes based on a regular schedule. If you have varying pay periods, it can be very confusing for your employees, and it might not show up in the computer system properly when you file for payroll taxes.
4. Ensure you don’t try to save money by telling your employees to expect their checks on Friday instead of Tuesday or Thursday. If you do this, you might need help with employees being able to cash their checks. It is because many banks are closed on weekends, and they might need help to get to their bank during the weekend hours to cash their checks before the due date. Many employees also like to take their paychecks and deposit them right away on payday, so if you vary the day your employees are getting paid, it can cause an inconvenience for everyone involved in your business.
5. Make sure you don’t mix up your payroll check-writing software and your financial software program that calculates whether or not it’s time to pay yourself. It’s common to use the same payroll program whenever you pay anyone else, but not to set up a separate financial account for yourself and keep your finances separate. If you do this, you might be overpaying because the payroll program is made to pay people, and some of the employees you are paying will be getting double payments from their checks.
You can hire a professional payroll service if you need help handling payroll for your company. They usually cost little money, and they will assist you with all the paperwork involved in setting up employee records and ensuring that your business meets all of the legal regulations to hire employees. They can also file all of the proper paperwork with the tax agencies to ensure that your business is set up properly and exempt from paying too much money to the government. Payroll companies can help you save time and money, so they are worth looking into if you have any questions or concerns about handling payroll in your own company.
Business Name: AmCheck Las Vegas
Address: 375 N Stephanie St #1211 Henderson, NV 89014
Phone: (702) 565-4110