Avoid Payroll Pitfalls With These Essential Tips
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Like many financial aspects of business, payroll isn’t an easy thing to get your head around. In fact, it’s a real bane of many business owners’ lives. Not only is it difficult, but it’s also potentially disastrous if you get it wrong! Mistakes are made all the time when it comes to payroll, even from people who are experienced with it. One slip up, and the term ‘payroll pitfalls’ will become very prominent in your workplace!
To save any instances like this, we’ll try and prevent them with the following tips. Let’s go!
Don’t Go It Alone
If you intend to handle the payroll responsibilities on your own, you’re taking on a huge task. There are numerous reasons why you shouldn’t be doing this. Firstly, it’s difficult! If you don’t know what you’re doing, you’re bound to struggle. Even if you do, mistakes are easily made. Without anyone else helping to spot potential errors, you could end up in a real mess. Unfortunately, the nature of payroll is that it’s a very hard task. Don’t underestimate this.
Understand Your Statutory Requirements
There are a few statutory requirements that all employees are forced to comply with, even if you don’t agree with them. It’s best to get your head around them now, or you’ll be struggling when the time comes. What do these statutory requirements include? You’ve probably heard of SSP, or Statutory Sick Pay, for example. Paternity pay is yet another requirement to consider, along with many others.
Software Won’t Save You
The great thing about software these days is that it can do pretty much anything for us. There are all sorts of programs that can automate your payroll and simplify the process. That’s brilliant. Amazing, even. But, if you’re relying totally on a software package to get everything right, you’re setting yourself up for failure.
You should be doing one of two things. Firstly, consider getting help from accountants like Raffingers to manage the payroll process. Or, take the time to make sure you’re very well trained about everything to do with payroll. In the case that your software goes wrong, you’ll then be able to identify the errors.
Additional Working Hours
This is a simple consideration, but one that is just as important as everything else on this list. There are times when your employees will be working additional hours on top of their usual requirements. This might be a generic case of overtime, or they might be coming in during the Christmas period, for example. Don’t forget to account for these instances via your payroll in the appropriate manner.
Employee Bonuses
When it comes to employee bonuses, everything gets a little confusing. This is one of those cases where an uneducated owner has the potential to make some severe mistakes. The reason for this is down to tax attribution. Lots of factors get involved, from the potential of reselling physical goods to the type of employee receiving the gift. In all honesty, seeking advice from the experts is your best bet in a scenario like this.
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