Why getting your payroll right is so important
For businesses, their most important asset is their staff, so keeping them happy is key to maintaining a successful business.
The most important area is payroll and given the cost-of-living crisis and rising costs, getting it right is even more crucial.
If it goes wrong, then the consequences could be severe and could affect not only the worker but the business itself.
Mistakes happen. Sometimes, payroll and human resources make errors. They may dock you a couple of hours or forget to issue a payslip on time for some reason or another. The key is that they must correct their mistakes quickly or risk legal trouble.
You have a right to ask for it to be corrected. You also have a right to ask your employer to ensure it never happens again.
What must be in a payslip?
- Gross amount, which is the total pay before deductions
- Net amount, this is the total pay after deductions
- Deductions for Income Tax, National Insurance, student loan repayments and pension schemes which can be variable
- How wages will be paid if more than one payment method is used, for example bank transfer and cash
- Fixed deductions, for example, gym membership or union subscriptions
Effect of payroll errors
Low employee morale can affect productivity, the team’s overall morale and can even result in employees leaving, which will cost you even more in recruitment costs.
Loss of trust – Once trust is lost, an employee may become demotivated and look for other employment, with a potential drop in productivity.
Reputation damage – Not paying employees on time can damage a business’s reputation with prospective employees deterred from applying.
Wasted time – Correcting errors is time-consuming and damaging to the business as the payroll department has to deal with angry staff.
Tax complications – Interest and penalties may be levied by HM Revenue & Customs (HMRC) where a person is late in making payments of PAYE tax and National Insurance Class 1/1A/1B NIC in the tax year.
If the monthly payroll process is a struggle for you, why not find out how our effective payroll services can make your life easier and help you avoid the pitfalls of getting things wrong?
Speak to our experienced payroll team today for support and advice.