4 Mistakes To Fix When Running Payroll

Payroll is not always simple. In fact, it can be one of the biggest headaches faced by a small firm. Payroll can be difficult, particularly when there are many different aspects of the job to think about, and current legislation must be followed to the letter. Mistakes do happen when you run payroll yourself. Here are some things you need to do if you encounter a mistake in your regular payroll calculations.

4 Mistakes To Fix When Running Payroll

1. Your PAYE Bill is Unusual

You need to pay PAYE to HMRC every time you run payroll for your employees. Sometimes the figures do not seem to add up. If the bill is not what you expect, check that you send your Full Payment Submission (FPS) or input the Employer Payment Summary (EPS) at the right time. You can also see if you reported the details in the FPS correctly, for example the amounts for pay and for deductions. Also check if you paid the right amounts previously, as you may have paid too little if your calculations were wrong in the past, and are correct now.

2. You Didn’t Account for New Employees

Make sure that you correctly reported any new staff and any employees who are leaving or left during the time period covered by the report. You may get the wrong bill if you didn’t do this on time.

3. You Made a Mistake on the Forms

If you made a mistake on either the FPS or the EPS this can reflect in the bill you receive. You may need to correct any of the following: the pay or the deductions, the payment dates, the employee information, or the amounts in the EPS. You may get charged a penalty, but generally only if you did not take reasonable care to avoid errors, or you deliberately inputted the wrong data.

4. You Paid the Wrong Amount

If you paid too little to HMRC, you can arrange to correct this in the next report you run. The underpayment will be added to the next bill. If you do not pay the balance then you risk a penalty fine. If you made a mistake and paid too much, this overpayment will be taken off your next bill. You also need to work out why you overpaid as there may be an issue in the account that you have not noticed, which could affect your future reports.

It can be difficult to avoid these kinds of problems when you are running payroll and you are not experienced or you do not have the time to dedicate to the task. This is why businesses often use external payroll companies to ensure that payroll is always completed on time, without errors. It makes a difference in the long run and can also result in significant cost savings.

Categorized as Business

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