5 Common Payroll Errors That Are Easily Avoidable

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It is a well-known fact that payroll processing is one of the most elaborate series of tasks that require careful attention and organized operation. Otherwise, the entire workflow could be adversely affected, ultimately leaving the employees suffering. Thus, steering clear of the big-small payroll errors, glitches, and mistakes is of utmost importance. Payroll processing is all about salary verification and structure, adhering to payroll laws, maintaining payroll records, responding to payroll queries, providing monthly payout on time, and related stuff. Thus, the issues that occur in this particular domain would also be related to the same set of functions. Now, to say that resolving these problems is as tricky as processing payroll would be wrong because almost all the payroll-related grievances can be managed using the payroll management software.

In this blog, we will tell you about the 5 common payroll errors as follows that are easily avoidable with a little consideration and precautions. 

  1. Uncategorized employees & contract workers
  2. Untracked irregularity & unpunctuality
  3. Wrong salary evaluation & deposit
  4. Non-compliant statutory deductions
  5. Mismanaged reporting & documentation

Let us throw some light on each error in detail and then we will spill the beans about the 5 problems’ one-stop solution, i.e. payroll software.

Employee Classifications

There are two categories of paid workers in any organization. The ones who work on a contractual basis and the full-time permanent employee base. Now, the working conditions, nature of work, policies, and pay scale is different for both. So, keeping the two types of professionals under the same radar, and putting them under the same payroll conditions is a huge mistake. Payroll software in India is highly employee-centric. So, while implementation, it is ensured that the employees are classified as per their job specifications and kept separately.

Time & Leave Errors 

Next, we all know that Payroll and TNA (Time & Attendance) go hand in hand. Another blunder that could happen is the lack of coordination between the two systems. If the daily attendance, holidays, and leaves are not recorded and managed properly, the final payout would be erroneous. Therefore, keeping track of the attendance and incorporating the salary calendar is a must to ensure no time-related errors in payroll management.

Salary Miscalculations

The aforementioned error (point 1 & 2) can lead to another fault in payroll, which is, overpaying or underpaying the employees. But, apart from TNA issues, there are other reasons for the same such as missed arrears and reimbursements, benefits & compensations, wrong paid day calculations, earnings & deductions miscalculations, etc. So, a top-notch payroll software that can automate the salary calculation without any errors or discrepancies is the solution here. 

Tax Non-Compliance

This is an important area where errors are common but highly troublesome. The payroll software in India must be compliant with the government laws and policies. The statutory deductions like EPF, ESI, LWF, Professional taxes, among others, should be as per the norm. Moreover, the payslip and tax slips should be auto-generated and the challans must be in the government-recommended format.

Poor Record-Keeping 

Lastly, the misunderstanding caused in the employees due to vague payroll information mentioned in the reports is a huge cause of errors. The reporting and documentation should, therefore, be thoroughly done and saved on the system. To save yourselves from future troubles and enable powerful decision-making through the insightful reports, it is necessary to maintain good record-keeping. 

The bottom line is that no matter how cumbersome people call the payroll operations, the solutions to each issue is quite simple. And if nothing suffices, payroll management software will always come to the rescue. 

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Sukriti Saini

Sukriti Saini works as a content marketing strategist at HROne. She has done Bachelors in Journalism from Delhi University and carries several years of experience in content development. HR trends, Productivity, Performance and topics related to Employee Engagement garner most of her writing interest here. During leisure, she loves to write and talk about fashion, food & life.

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