Five payroll mistakes you must avoid

Melanie Richardson


Doing your payroll may be time-consuming, but get it wrong at your peril. Not only are there multiple legal and tax implications to accommodate, but any errors have a direct impact on your employees. This is costly and can test the credibility of your business. So, here are five of the most common payroll mistakes and how to avoid them:


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Poor payroll planning


Don't simply rely on remembering to do the payroll at some point before the end of the month. Have a proper plan in place, and stick to it. Create a schedule (monthly or weekly, depending on paydays) and make time to do your payroll then. Your employees must be paid on time. Fail to do so, and they'll start looking for work elsewhere.

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 Avoiding new regulations


It's easy to get bogged down in red tape. But there is no excuse for not keeping up to date with the latest payroll laws and regulations. Your accountant can certainly help, but it's easy to visit the official government advice pages for more information. There's also plenty of free local resources, like your Chamber of Commerce.

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Incorrect payroll basics


You may well have worked out someone's correct wages, but are they technically an employee? Maybe they're a freelancer or contractor? The point is they needn't necessarily be on the same payroll as your own members of staff. Another classification error might be including someone's expenses, which could be tax-free, within their salary, which is taxable.

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Lack of communication


There may be a time when you need to change your payroll dates, perhaps from a weekly to a monthly basis. Or you need to alter the day of the month that your staff get paid. While you're perfectly entitled to do this, never do so without liaising with staff first, as they may struggle with cash flow issues as a result.

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Failure to backup information


You might have some fancy software to work out your payroll but make sure it automatically creates backups. If the system crashes, you can't afford to lose key data.


If you are interested in discussing payroll options for your business please get in touch with our managing partner Melanie Richardson


Melanie managing partner East Sussex Accountants

Melanie Richardson - Managing Partner


Tel: 01825 763 366

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