It is indeed a difficult endeavor to provide for the livelihood of many employees. It is important that all the proceedings related to payroll are done accurately, else employers risk losing the goodwill and trust of their employees. The IRS takes serious action against payroll penalties. So, employers must make sure that they are completely on point while dealing with all errors related with payroll. They must make sure to pay all the taxes, fill all the required forms for the government and most of all, make sure that the employees are paid the amount on the right time.
A few tips to prevent errors in payroll
The simplest way is to make sure that the bookkeeping is done with the sharpest accuracy and is up to date with all the data related to the payroll. All the documents related to employees, and this includes time sheets, should be curated in an orderly manner. It is also important to adhere to the right date on which the employees are supposed to be paid.
Payroll check errors
When an employee is given their payroll, the amount written should be processed accurately. The taxes that have to be deducted and other detailed should be calculated correctly and then the check should be made. But sometimes, payroll checks, which include bonuses and payday advances, are simply not updated on the books and this causes an error while balancing the books.
Processing gift cards and other gifts
A good way to reduce deductions to an employee’s gross pay is to give gift cards, prizes and awards. These come under taxable fringe benefits. But since these gifts do have monetary value that can be redeemed by the employee, it is important that are added in the pay stub along with the other deductions. This may be considered a part of the net pay.
In some schemes, the employee is reimbursed by the employer for all expenses that they incur for the sake of business transactions for the company. In such a case the employer should receive the excess amount that remains after such a transaction. This should also be added in the relevant field.
The payroll process
The employees should be paid what has been the mutually agreed amount by the employer. Sometimes, errors do occur and the employees might receive a paycheck that contains an amount that is higher or lower than their net salary. Such instances must be rectified from both the ends, in order to prevent mistake in the bookkeeping.
Why save your stubs?
A paystub, by itself is seemingly an inconsequential document, but it must be safely retained by the employees. This is because the pay stub contains the employees’ pertinent information such as social security number, bank details etc., and also various fields of their net pay. This is also a proof for both the employees and employers. Payroll can be processed smoothly, provided both the employer and employee co-ordinate.