Mistakes in Payroll Management That Can Cost You a Lot 

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    Payroll processing is a nightmare for most payroll managers, especially in the case of a manual system. The reason is that payroll is a time-consuming process that involves sensitive calculations, data collection, keeping records, and generating payslips. Moreover, the payroll department is also responsible for tax payments which is a tough job. However, the use of the final pay calculator of Netchex or any other reputable company can solve this issue. 


    An unintended mistake or miscalculation in the payroll process can lead to severe disasters including heavy fines, penalties, and loss of credibility. Mistakes and delays in payroll payments also reduce employees’ working potential and loyalty toward the company. Therefore, it’s quite important to deal with the payroll process accurately and efficiently. 


    To avoid errors or mistakes in the payroll process it’s essential to have awareness of mist repeated errors. Therefore, we listed here some common mistakes that are often done by payroll managers or departments and how to avoid them. 


    Wrong or Miscalculation of Payments 

    The most important step in the payroll process is the calculation of payroll payments and generating pay slips to ensure timely payment of employees’ wedges. It needs to be done very accurately to avoid any misunderstanding or unwanted drama. However, often managers fail to calculate accurately while working with spreadsheets or on paper. 


    Insertion or deletion of a single digit can lead to severe consequences such as heavy fines and penalties. Moreover, the correction of errors also consumes a lot of time which results in a delay in payments and other processes also. Shifting to automatic mode can solve this problem. 


    Poor Time Tracking 

    Tracking employees’ working hours is important for the accuracy of the payroll process. When doing this task manually, most managers skip calculating extra working hours, paid leaves, and bonuses. And also forget to deduct extra leaves. As a result, some employees get extra payment, while some get less payment than the actual amount of money. This scenario is problematic for both employees and the manager. 


    Implementation of time tracking software is the best solution to this problem. It not only enhances accuracy but also strengthens employees’ trust in the company by providing them easy access to their working calendars. 


    Misclassification of Employees 

     There are several types of employees including temporary, permanent, and contract bases. Accurate classification of employees is crucial to avoid payroll errors and mistakes. However, the misclassification of employees is the most repeated mistake by payroll managers. 


    Placing a single employee in the wrong category can result in heavy fines by the tax department. The reason is that tax payments and rules are different for different types of employees. The use of payroll software can eliminate this headache by automatically placing each employee in the right category. 


    Forget To Keep Records 

    Regardless of the size and type of business, keeping a record of 6 years data is crucial for each payroll department. In manual processing, managers are often stuck with the issue of missing files or losing some important data that can cause hurdles in the growth of the business and serious situations can lead to unbearable financial loss. 


    Implementation of digital payroll solutions can create ease for the payroll department. It keeps all the data safe and one can easily check any record within a single tick.  


    Keeping a record of employees’ personal information, bank details, and other essentials is an important task in the payroll process. But often payroll departments failed to maintain confidentiality which can cause serious problems. 


    Adopting encryption software from Netchex, the best Kronos alternative can sort out this issue. It encrypted the data and needed a specific key to access the data.



    Payroll is an important pillar that helps your business to stand firm. Therefore, an errorless and effective payroll strategy is important to keep employees productive and run the business smoothly. Investment in modern technology to shift the payroll process from manual to digital mode  can help you to cut the cost of fines and penalties.