Whether you own a small business with one employee or a growing company with dozens, mistakes are bound to happen. Unfortunately when it comes to payroll, those mistakes can end up costing you a pretty penny.
Did you know that in 2014 U.S. businesses were fined roughly $5 billion in payroll tax penalties? That’s a good chunk of funds to give up for unintentional mishaps. But don’t add a payroll penalty line item to your budget yet! We have compiled a list of eight common payroll mistakes that businesses make so you can avoid them…and the penalties that follow.
ONE. Demographic errors
TWO. Incorrect classification of workers
THREE. Improper handling of garnishments, levies, or child support
FOUR. Failure to record manual checks
FIVE. Late or incorrect tax deposits
SIX. Outdated SUI rate
SEVEN. Treating payroll as a backburner function
EIGHT. Failure to apply changes in laws & regulations
There you have it, eight payroll mistakes and what you can do to avoid them. Payroll is a complex and ever-changing function where mistakes are far reaching, easy to make and difficult to resolve. By being aware of common mistakes, you can expertly pay your employees and your taxes while also avoiding costly penalties. Now that’s a win-win-win - for you, your employees and your bottom line.
For tax and legal guidance, please seek the counsel of a certified tax professional and an attorney. Inova Payroll does not provide professional tax and legal services.