Most common payroll tax mistakes
#1 Not keeping tabs on local laws and requirements.
Did you know? 49% of payroll and HR professionals say continuous changes in legislation and regulations drive payroll complexity? Sage payroll and HR in SA: Rising to the challenge of change research report.
Globally, legislation is becoming more complex because of continual amendments. Even the most experienced payroll professionals turn to different resources to keep them up to date. Missing any important mandates can have significant repercussions for a business, which is why it’s important to invest in resources with the expertise to keep you informed.
#2 Misclassifying employees and contractors
Understanding worker classification and getting it right is important because it impacts employment tax. It also impacts whether the worker is entitled to applicable deductions and leave and how their remuneration should be reported.
#3 Late payments
Deadlines are another complexity of payroll tax – specifically payment due dates. It’s important to keep a calendar that outlines important dates, so nothing slips through the cracks.
#4 No audit controls
If you’re not keeping up with local legislation and don’t have a system in place to regularly check for compliance, your organisation is vulnerable to discovering inconsistencies when it’s too late. Businesses that implement processes to control compliance are more prepared in case of an audit and can catch costly inconsistencies in advance.
#5 Data inaccuracies
Businesses that use outdated tools to manage payroll data inherently need to spend more time double-checking their figures because of the higher margin of human error. 88% of spreadsheets contain significant errors that can result in overpayment, underpayment and penalties.
To protect your company from costly fines and possible litigation, you need to stay informed about employment laws, reporting rules, and other factors of compliance. This guide looks at frequent compliance challenges, as reported by payroll experts, and offers best practices and solutions to help your payroll function run smoothly and confidently.
Do you need help with your Sage HR and Payroll software? Get in touch with us: https://bit.ly/3Q1WGkW