Many small and medium-sized businesses pay IRS penalties due to payroll mistakes. Although it’s ideal to avoid these errors whenever possible, the reality is, payroll mistakes happen and the consequences can be expensive.
In this blog, we’ll look at some of the most common payroll errors, as well as the best way to avoid those mistakes by using HR software designed to make payroll for bookkeepers easier.
What are some of the most common payroll mistakes?
- Mis-classifying employees and contractors: Classifications like independent contractors, non-exempt employees, and exempt employees greatly affect the way a person is taxed.
- Processing payroll for the wrong state: Calculating employees’ wages and withholdings based on where the company is located instead of where the employee is actually working can lead to wage inaccuracies that can be costly to correct.
- Keeping inaccurate or incomplete payroll records: Companies that don’t keep up-to-date records or records that are inaccurate may be required to pay fines or face penalties that could cost anywhere from $50 to several thousand dollars.
- Miscalculating over time (or not paying it): If you don’t keep accurate time records or you do not provide overtime pay when it is legally required, you could face hefty fines or even civil penalties.
- Missing employment tax deadlines: If you don’t know when your employment tax due dates are, you will be penalized by the IRS.
Payroll for bookkeepers: The best way to avoid costly mistakes
So what’s the easiest way to prevent payroll mistakes? Payroll and HR software that makes payroll for bookkeepers easy, convenient, and error-free. This type of software double checks your work to help you avoid data entry errors and accidental miscalculations. Find a software for payroll for bookkeepers by visiting this website.
Additionally, many types of payroll and HR software programs will automate certain things, like employee pay rates, to cut back on manual entry time and reduce opportunities for mistakes. Or, they can auto-adjust pay rates by job function, auto-calculate tax rates by store location, and much much more.
Payroll and HR software improves the process of completing payroll for bookkeepers by cutting back the total time it takes to get the work done, reducing errors, and automating complex tasks.
Read a similar article about how to run small business payroll here at this page.