Payroll processing is quite often a very manual process with spreadsheets and calculations being worked by hand. This can lead to mistakes in the process, and payroll mistakes can be quite costly to correct. These mistakes can lead to employees being paid incorrect amounts or, in some cases, large fines for failure to comply with the law. Either way, payroll mistakes are no small issue and every effort should be made to avoid them.
In this article, we will be covering the four main common payroll mistakes and how they can be avoided with the help of modern employee time tracking software.
Incorrect Overtime Pay
This can be one of the more costly errors as incorrect overtime payments can lead to hefty fines for non-compliance with overtime laws. Manual calculations of overtime can be extremely complicated. Each state has their own overtime laws on top of the federal FLSA laws. Following all these rules can be confusing when manually calculating overtime hours and pay. However, employee time tracking software can make these calculations much easier.
With an online timecard system, there is no need to perform these manual calculations. The software is programmed with all these rules already built-in, so the calculations are always correct based on the current rules. As the rules change, the software is updated so that you do not have to worry about changing your manual calculations each time there is a rule change.
Employee time tracking software takes the hassle and worries out of calculating overtime and making these payments. Plus, your employees will be happier because they know that they will be paid correctly.
Improper Tax Calculations
Like overtime calculations, state and federal tax withholdings can be extremely complicated. Manually calculating tax withholdings can lead to big issues down the road if done incorrectly. However, employee time tracking software can automate these calculations. The time and attendance app can even handle things seamlessly if you have employees working in different states. This allows for faster processing of your payroll and might even get your employees paid more quickly in some cases.
Manual payroll processing is only as good as the timesheet data the payroll team receives. If an employee forgets to punch in or out, it can cause big headaches for payroll. HR staff is left to figure out what hours the employee actually worked on that day. In some cases, hours may be missing that payroll does not know about. The employee will not get paid for those hours, and it could even go unnoticed by the employee.
Employee timesheet software can almost completely eliminate missing or incorrect hours on timesheets. The online timesheet software records the amount of time worked by employees down to the minute, so payroll staff is no longer left guessing at an employee’s hours. This ensures that each employee is paid exactly the proper amount for the pay period. This will benefit both the employee and the business.
This is a big one because it can cause employees to receive their paychecks later than expected. If timesheets are not received on time or some HR staff is on vacation, payroll may be processed late, and paychecks not received on time. This issue could be avoided by using employee time tracking software.
When using online time clock software, you no longer need to worry about late timesheets. Payroll can be processed automatically through the app, so processing is no longer affected is someone is out sick. Employees can be confident that they will receive their paychecks on time, and this is a huge deal for most employees. If employee time tracking software prevents you from processing payroll late, then it is worth the investment.