Organizations spend hours each payroll period collecting time sheets, auditing time worked approving employee time, and applying pay rules accurately.
However mistakes do happen. Honest time reporting errors, incorrect pay rates, overtime errors, missing forms, are just some examples of payroll mistakes that costs businesses money and increases compliance risk.
Don’t wait for one of these to creep up, be proactive and keep compliant.
Here are our top 10 payroll mistakes:
(How many of these can you say with 100% uncertainty you haven’t made or will never make?)
1. Making improper overtime payments
2. Misclassifying employees as independent contractors
Learn the IRS and DOL tests in our January Blog Article, “Classifying workers as employees vs independent contractor”
3. Making mistakes on an Independent Contractor W-9
4. Missing tax deposit or filing deadlines
5. Incorrectly determining exempt vs. non-exempt
Download our FLSA Exempt Employee Flow Chart as a guide to proper employee classification.
6. Mistakes on 1099-MISC forms for independent contractors
7. Messing up or mishandling garnishments, child support payments or levies
8. Ignoring other taxable items, such as gifts, prizes, bonuses and awards
9. Incorrect or out-of-date I-9 forms
The USCIS released the New Smart I-9 form on November 22, 2016. Read about the new form in our blog post, “USCIS Releases New I-9 Form,” November 2016
10. Payroll deduction errors
Get more specifics on common payroll deduction errors from our Blog post, “Payroll Deductions Laws and Employer Best Practices,” April 2016
