3 Common Payroll Mistakes

by | Nov 11, 2020

Wouldn’t it just be easier to take care of payroll yourself? If you’re processing payroll for anyone other than yourself, the answer is probably “No!”

Processing payroll is complicated and it’s important you do it correctly. Mistakes can impact employees and your bank account. Here are three common payroll mistakes.

Running payroll late

You look at the calendar and realize the first of the month is tomorrow. The checkbook is at the office, and your bookkeeper left for home hours ago. Even the most loyal employees won’t stay around if you forget to pay them on time. 

Not processing payroll on time is bad for business and can cost you thousands of dollars in fines. If you’re processing checks at the last minute, you’re much more likely to miscalculate overtime, bonuses, tips, commissions and taxes. Using a service standardizes your payroll process and helps you avoid late paychecks and mistakes.

Missing tax payments and filings

Taxes! It seems like they’re due every day when you own your own business. Payroll taxes are typically due monthly, but depending on how much tax you collect, you may have to pay weekly. Most cities and states collect taxes too. Late payments usually incur penalties and interest, which can add up quickly. International Bancard’s Payroll* service handles taxes and filings for you, reducing your risk of missed or late payments.

Not preparing for premium increases

Adding more employees is a sign of a healthy and growing business. That’s a good thing. However, hiring more people to work at your business comes with more payroll paperwork for you. Workman’s compensation premiums are calculated each year based upon your payroll expenses and many business owners are shocked to discover huge increases to their premiums at the end of the year.

Should this unfortunate situation happen to you, meticulous business records will help you get through it — especially payroll records. You’re required to archive your payroll records for at least the last three years. Some states require businesses to keep them even longer. Check with your state labor office. The documents you need to hold on to vary from state to state, but they typically include I-9s, W-4s, timesheets, and payroll files (tax forms, pay stubs, etc.).

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