Four common payroll mistakes and how to avoid them

Discover the most prevalent mishaps with payroll and what to do when those problems arise 


Payroll management is an important responsibility as a business owner, and it can be difficult to tackle on your own. There are a few common payroll mistakes that often occur, but are completely avoidable with the right training and support. 


Continue reading to learn about the common bumps in the road when it comes to managing payroll and what to do when they appear. 



#1: Misclassifying employees

Under the Fair Labor Standards Act (FLSA), an employee is entitled to minimum wage and overtime pay protections. However, an independent contractor or exempt/nonexempt employee is not awarded these same rights.


When managing payroll, it’s important to pay close attention to how your employees are classified to prevent any legal issues or costly payroll errors. 



#2: Disorganizing records 

Paperwork can seem simple, but don’t let the uniformity of it fool you. Triple check that all forms needed to onboard an employee are correct to ensure there are no issues when it comes time for payroll.


Incomplete documents or failing to keep track of them entirely can result in payroll errors that can be difficult to manage. 



Related resource:

Three perks to partnering with a PEO for small business payroll services 


#3: Paying the incorrect amount 

When it comes to employee pay, getting the amount right for each individual is a crucial part of payroll management. Not only can getting it wrong affect the company’s overall financials, it can also deeply affect the lives of the employees involved.


Everyone deserves a reliable paycheck. Ensure that any possible changes to an employee’s pay like overtime is accounted for before submitting payroll.



#4: Missing deadlines

Deadlines are always important to respect, but when it comes to paying employees, they are a consequential event.


Employees shouldn’t be in the crossfire of a missed deadline or pay period. It can be a vigorous process to make up for time lost and can cost the company in legal fees, penalties, and interest. 



Related Resource: 

Top eight reasons to partner with a PEO for payroll services (and more!)



To conclude

Handling payroll can be tough to do without the right support. Consider working with a professional employer organization (PEO) to help with human resource responsibilities like payroll and worker’s compensation. By sharing liability with a PEO, your business will be equipped to take on all important payroll processes. 



Need a PEO to partner in the Orlando area?

Through our commitment to building trusted relationships, our clients find value in our compliance and advising services that go far beyond simply running payroll. PER is ready to tackle your payroll management and other HR needs, so that you can focus on your day-to-day business direction.



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