Tax rates change, so whatever rates you first stared using to pay your employees may not be applicable or correct now. Paying the wrong rate means you need to make up any taxes, penalties, and interest.
On a regular basis, check your employment tax rates as most tax rates are updated each year. Keep an eye on the following on how to fix payroll mistakes:
• Social Security tax
• Federal income tax
• Medicare tax
• Federal unemployment tax
• State income tax
• State unemployment insurance tax
• Local income tax
Depending on your location, then keep your eye on any rates for additional taxes.
Payroll Staff (Making Errors in Data Entry)
If you are lucky, you have a payroll staff or you outsource. If you are not. you DIY. In the end, though, you cannot eliminate 100% of the mistakes. You can
only reduce them. It does not really matter if it is you or someone else making the mistakes. We all make typos, and anyone can accidentally enter 20 hours instead of 2. That is 18 billable hours birthed by a typo. It is best to use a quality payroll tracking tool.
Preventing payroll mistakes (and potential future litigations) can be as simple as giving your employees the tools and processes needed to communicate with you and your managers about any payroll inaccuracies.
If your employees catch payroll discrepancies, have a formal process in place so they can report these issues and more importantly, you can quickly resolve the discrepancy before they become bigger problems.
Contact us so we can help you avoid errors that may cause litigation or costs with regards to payroll.