There are payroll mistakes that benefit employees, as well as those that benefit employers. But either way, a mistake is a mistake.
If you come across any type of mistake, such as overpaying or underpaying employees, it is imperative to act fast, discuss the situation with your workers, and provide a remedy that will allow both parties to put this in the past.
Most established companies have a payroll service in place. This allows them to take care of every last detail, regardless of how big or small, with less concern about making a payroll mistake.
New companies are not always as fortunate. Since they are just getting up and running, they are more prone to make a mistake. Below are the most common payroll mistakes committed by new companies:
- Overpayment or underpayment. It can be tricky to pay each employee the proper amount, especially when dealing with different worker classifications and work schedules.
- Failing to accurately account for and pay the necessary taxes.
- Misclassifying an employee as an independent contractor. The IRS can help you avoid this mistake.
- Not including gifts and bonuses on employees’ annual W-2. Remember that holiday bonus you gave the sales team? What about the gift cards you handed out to your customer service reps? It may not sound like a big deal, but the fair value must be reported.
- Ignoring a garnishment request. You don’t want to deal with this as a new business owner, but you aren’t given the option. If you receive a garnishment request, such as by the IRS, make sure you comply. You don’t have a choice.
New companies have a lot on their plate, which is one of the reasons why they are more likely to make payroll mistakes. Don’t fall prey to one of the situations above. Instead, know your obligation as an employer and do whatever it takes to implement the appropriate payroll system. Gurian CPA Firm can ensure you and your company are in compliance. Contact us today for more information.
